CoStar News – RioCan Getting Ready to Sell More Assets
Southbank Centre, 25 KM From Calgary, For Sale in Latest Wave to Hit Market as Part of $2 Billion Disposition Plan
RioCan, the country’s largest real estate investment trust, is getting ready to list more assets for sale as part of its plan to dispose of $2 billion in property and refocus on six core markets.
CoStar News can report the Toronto-based REIT has secured CBRE Ltd. to market properties about to hit the market.
The brokerage has prepared a brochure for Southbank Centre, a 145,213-square-foot retail property in Okotoks, Alberta, marketing the asset as part of the “rapidly intensifying community in the Calgary region.”
The property in the Calgary bedroom community, about 25 kilometres south of the city, would seem to not fit into RioCan’s core plan, which also includes Edmonton, Toronto, Ottawa, Montreal and Vancouver.
“Southbank Centre is on the market, as are others,” Ed Sonshine, chief executive of the REIT, confirmed, via email.
Sonshine has said the sale process is accelerating but it will probably still take two years to dispose of all $2 billion in real estate being targeted, which is expected to deliver $1.5 billion in net proceeds but still leave RioCan the largest REIT in Canada.
In November, RioCan announced the first move in the strategy with a $200 million sale of seven retail properties in Ontario, British Columbia and Saskatchewan to CT REIT, the real estate arm of Canadian Tire, which was the anchor tenant of the properties sold.
Sonshine has said RioCan is selling some of the 100 properties in “packages” and received interest from buyers shortly after announcing the planned disposition.
In Southbank, RioCan is selling a property that is shadow anchored by destination retailers that include Costco, Home Depot and Save-on-Foods, and is 97% leased with tenants that include Goodlife, Winners, Michels, Sport Chek and Dollarama. The average weighted average lease term at the centre, first constructed in 2009, is 5.6 years.
CBRE is marketing the property as “regional investment opportunity”, but the cover page of the brochure suggests Southbank is a Calgary play.
“South Centre is ideally positioned within a region that is currently experiencing significant expansions with a 79% year-over-year increase in housing starts,” the brochure states, referring to third quarter 2017 statistics.