RioCan Advances the Monetization of its $1 billion RioCan Living Residential Rental Portfolio with $197.3M of Strategic Dispositions

Business Wire

27-05-2025

TORONTO--(BUSINESS WIRE)--RioCan Real Estate Investment Trust ("RioCan" or the "Trust") (TSX: REI.UN) announced today that it has entered into firm agreements to sell its 50% interest in four RioCan Living residential rental properties. Upon closing, the Trust is expected to generate total gross sale proceeds of $197.3 million, inclusive of the Q4 2024 sale of Strada. Additional proceeds are anticipated from the sale of a Toronto residential rental property, which is in late-stage negotiations. These transactions are expected to close in Q3 2025 with the purchase prices in line with RioCan's IFRS values. As at Q1 2025, the RioCan Living residential rental portfolio included 13 income producing properties and two properties under development and was valued at approximately $1.0 billion. RioCan is maximizing the value of this portfolio through the sale of individual assets or subsets of the portfolio, and will focus on completing these sales in-line with IFRS values within the next 12 to 24 months.
'With RioCan Living, we've developed a portfolio of transit-oriented, mixed-use properties in Canada's major markets. Having achieved its intended scale, we are focused on generating maximum value from this one-of-a-kind portfolio. These strategic dispositions are a significant milestone in the RioCan Living asset monetization strategy, demonstrating the portfolio's immense value,' said Jonathan Gitlin, President and CEO of RioCan. 'Given the numerous attributes that differentiate our portfolio in this competitive market, we have full confidence in the Trust's ability to continue to unlock its intrinsic value. The outcome is increased financial flexibility for RioCan and a simplified business model focused on our core retail business.'
Following the close of the firm agreements, the RioCan Living portfolio will consist of nine income producing properties and two properties under development with a total valuation of approximately $0.9 billion, based on the Trust's most recent IFRS values. There continues to be considerable interest in the remaining assets in the RioCan Living portfolio.
These RioCan Living asset dispositions drive:
Value Creation: These transactions crystallize the value created through past development efforts.
Balanced and Accretive Capital Recycling: The net proceeds from these transactions will be used to reduce the Trust's debt and to support its Normal Course Issuer Bid (NCIB) program. RioCan has remained active under its NCIB program, buying back the Trust's Units that continue to trade at a significant discount to NAV. Since the start of 2025, the Trust has purchased and cancelled 5.5 million Units at a weighted average price of $17.99 per Unit for a total cost of $100.0 million, before equity buyback tax. RioCan's stated balance sheet objective of maintaining an Adjusted Debt to Adjusted EBITDA ratio within the 8.0x to 9.0x range remains unchanged.
Value Validation: These transactions confirm the RioCan Living portfolio's IFRS values and demonstrate clear demand for RioCan Living's best-in-class portfolio.
Business Simplification: By monetizing the RioCan Living portfolio, the Trust is simplifying its business, with a continued focus on its core, productive retail operations that generate reliable and resilient growing income.
Improved Unsecured Debt to Total Contractual Debt Ratio: Upon completion of these transactions, the purchasers will assume the existing CMHC insured mortgages, which will further improve the Trust's Unsecured Debt to Total Contractual Debt ratio 1. Inclusive of the previously disclosed repayment of maturing mortgages in May 2025, this ratio is expected to improve from 57.3% as at Q1 2025 to approximately 60%.
RioCan Living Asset Monetization Update:
About RioCan
RioCan is one of Canada's largest real estate investment trusts. RioCan owns, manages and develops retail-focused, mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at March 31, 2025, our portfolio is comprised of 177 properties with an aggregate net leasable area of approximately 32 million square feet (at RioCan's interest). To learn more about us, please visit www.riocan.com.
Forward-Looking Information
This News Release contains forward-looking information within the meaning of applicable Canadian securities laws. This information reflects RioCan's objectives, our strategies to achieve those objectives, as well as statements with respect to management's beliefs, estimates and intentions concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information can generally be identified by the use of forward-looking terminology such as 'outlook', 'objective', 'may', 'will', 'would', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'should', 'plan', 'continue', or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. All forward-looking information in this News Release is qualified by these cautionary statements. Forward-looking information is not a guarantee of future events or performance and, by its nature, is based on RioCan's current estimates and assumptions, which are subject to numerous risks and uncertainties, including those described in the ' Risks and Uncertainties ' section in RioCan's MD&A for the three months ended March 31, 2025 and in our most recent Annual Information Form, which could cause actual events or results to differ materially from the forward-looking information contained in this News Release. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information.
The forward-looking statements contained in this News Release are made as of the date hereof, and should not be relied upon as representing RioCan's views as of any date subsequent to the date of this News Release. Management undertakes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.