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RioCan REIT sees profit rise in second quarter despite Hudson's Bay strife
RioCan signage is shown at a strip mall in Mississauga, Ont., Saturday, Oct.24, 2020. RioCan is one of Canada's largest real estate investment trusts. THE CANADIAN PRESS/Richard Buchan
TORONTO — RioCan Real Estate Investment Trust says it's cutting financial ties to five properties held in its joint venture with the now-defunct Hudson's Bay as it works to move past the debacle as quickly as possible.
'We can report that RioCan has elected not to participate financially in 5 of 12 assets,' said chief financial officer Dennis Blasutti on an earnings call Friday.
'What it means is that we will not put any more money into the assets, in any form.'
RioCan was in a joint venture with Hudson's Bay that held the properties of 12 Hudson's Bay locations, but all stores closed at the start of June after liquidation sales.
Blasutti said that given the amount of debt associated with the five properties, and their future prospects, RioCan decided there wasn't enough potential for financial returns to dedicate any more money to them.
Debt on the properties, which one analyst noted runs past $100 million, is no longer RioCan's problem, said chief executive Jonathan Gitlin.
'We're no longer liable for that debt,' he said on the call.
RioCan said its net investment in the joint venture was $40.2 million or 0.5 per cent of RioCan's total equity as of the end of June.
The company is cutting ties with the HBC leases while reporting that it's own overall portfolio of properties continues to see strong gains in lease rates, despite tepid economic growth.
RioCan said its blend of new leases and renewals shows a 20.6 per cent increase in new lease rates compared with old ones, including spreads on new leases of 51.5 per cent.
'Demand continues to be strong from top tier necessity-based retailers that thrive in any economic backdrop. Their margins are well protected, allowing them to absorb market rents,' said Gitlin.
Its retail occupancy rate was 98.2 per cent, compared with 98.3 per cent last year.
The company reported a net income of $145.6 million for the quarter that ran to June 30, up from $122.3 million in the quarter last year.
It said net income was 49 cents per unit for the period, compared with a profit of 41 cents per unit for the same quarter last year.
Revenue totalled $361.7 million, up from $292.2 million last year.
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Ian Bickis, The Canadian Press
This report by The Canadian Press was first published Aug. 8, 2025.
