RioCan, First Gulf sell T.O.’s Kennedy Commons shopping centre

IMAGE: The Kennedy Commons shopping centre in Scarborough is being sold by RioCan REIT and First Gulf. (Google Maps)

The Kennedy Commons shopping centre in Scarborough is being sold by RioCan REIT and First Gulf. (Google Maps)

RioCan REIT (REI-UN-T) and co-owner First Gulf have an agreement to sell the open-air Kennedy Commons shopping centre in Toronto’s East End to an unnamed “local private investor” for $215 million.

The announcement was made Tuesday morning in a statement by RioCan updating over $500 million in recent retail and multiresidential transactions. The announcement is an update on the REIT’s capital recycling program as it continues efforts to sell off non-core properties, in part to fund and increase its portfolio weighting in the multiresidential sector. 

“RioCan is seizing the opportunity arising from increased demand for convenience-based, well-located retail assets that are typical of those in our portfolio,” said Jonathan Gitlin, president and chief executive officer of RioCan, in a prepared statement. “The trust is crystallizing the value inherent in our assets and redeploying proceeds into higher-return initiatives. 

“At the same time, we are positioning our portfolio and pipeline to accelerate growth.” 

RioCan also provided additional details about several other recent transactions. So far this year the trust has disposed of $880 million in properties at a weighted average capitalization rate of 3.74 per cent. 

All but $16.5 million of those transactions are either closed or firm.

“These transactions reinforce the quality and value that exist within our well-positioned, major market property holdings,” Gitlin said in the announcement. “The proceeds will work hard for our unitholders as the disposition program effectively repatriates capital to more beneficial uses, strengthening RioCan’s balance sheet and funding more diverse projects that generate higher returns.”

The transactions are:

Kennedy Commons

RioCan and First Gulf have been 50 per cent co-owners of this property, a 412,000-square-foot, grocery-anchored, open-air centre in Scarborough. RioCan acquired the centre in 1999.

Major tenants in the 38-unit centre include a Metro grocery store, Chapters book store, Foody World and PetSmart. 

Located at 2021 Kennedy Rd., it is at the junction of Kennedy and Hwy. 401.

The sale price represents a cap rate of 4.49 per cent based on in-place NOI. The transaction is expected to close in Q4 2021, subject to customary closing conditions.

Centre Carnaval LaSalle

Located in the LaSalle area of Montreal, Centre Carnaval LaSalle was acquired in 1998 and is a 208,000-square-foot, grocery-anchored, open-air centre. 

RioCan and its 50 per cent co-owner, Groupe Harden, sold the property to Montreal-based private investor and developer Brivia Group for $70 million in September. Based on in-place NOI, the price represents a cap rate of 2.09 per cent but it also reflects redevelopment potential.

Impact Plaza

The Impact Plaza in Surrey, B.C. (Courtesy CBRE)

Acquired in 2006, Impact Plaza is a 135,000-square-foot, grocery-anchored, open-air centre in Surrey. Anchored by a T&T supermarket, it is shadow-anchored by the adjacent Guildford Town Centre, the dominant shopping centre in the region.

RioCan sold the property in Q3 2021 to a “local private developer” for $73 million, representing a capitalization rate of 4.5 per cent based on in-place NOI.

In its marketing for the transaction, the CBRE National Investment Team noted: “The property is also well positioned as a future development site.”

The site also includes a three-storey office building with retail at grade.

Bentall GreenOak / Sun Life Assurance Company joint venture

RioCan closed the sale of a 50 per cent non-managing interest in a three-property portfolio expanding its existing partnership with BGO / Sun Life. 

The portfolio, based in the Greater Toronto Area, is comprised of the Pivot multifamily rental property and two grocery-anchored retail assets, RioCentre Oakville and Spring Farm Marketplace.

The sale price for the 50 per cent interest was $151.2 million, for a blended capitalization rate of 4.11 per cent based on in-place NOI for the income-producing retail properties, and stabilized NOI for the residential property which is leasing up. 

Pivot is 68.4 per cent leased after being launched in Q4 2020.

RioCan is slated to release its Q3 2021 financial report on Nov. 9.

About RioCan

RioCan is one of Canada’s largest real estate investment trusts. 

The Toronto-based REIT owns, manages and develops retail-focused, increasingly mixed-use properties located in high-density, transit-oriented areas.

As at June 30, 2021, RioCan owned 214 properties with an aggregate net leasable area of approximately 37.2 million square feet (at RioCan’s interest) including office, residential rental and 15 development properties.



Don is a veteran editor and journalist with four decades of experience in print and online news, including 20 years at the Ottawa Sun. Prior to joining RENX, Don was…

Read more

Don is a veteran editor and journalist with four decades of experience in print and online news, including 20 years at the Ottawa Sun. Prior to joining RENX, Don was…

Read more



Industry Events