RioCan Real Estate Investment Trust teamed up with Tricon Capital Group and Diamond Corp. earlier this month to acquire retail outlets and a block of land in midtown Toronto near the Summerhill subway station for $85 million from Woodcliffe Landmark Properties.
The deal includes Shops of Summerhill, with about 31,000 square feet of fully occupied retail space, and an adjoining block of land that contains a four-storey office building and a parking lot with the potential to host a high-rise tower.
“Our role at this point is to own the existing retail,” said RioCan chief executive officer Ed Sonshine. “Ultimately, I think if Tricon and Diamond Corp. are successful in creating a new building there, we’ll get involved in the retail component.
“I think there’s an opportunity to create there and that’s what excited us: a little retail node that’s very urban with an internal walkway and cafes. You’re on the edge of Rosedale so I think there can be a much better retail component there, and that’s the type of retail we want to own. Not that we’re getting rid of other stuff, but we really want to be a big city REIT much more than we have been in the past.”
RioCan and Diamond, one of Toronto’s largest condominium builders, have also partnered on The Well project in the city’s western downtown. Tricon manages residential real estate assets in Canada and the United States.
RioCan is Canada’s largest real estate investment trust with a total enterprise value of approximately $16 billion as of March 31. It owns and manages Canada’s largest portfolio of shopping centres, with ownership interests in 303 retail and mixed-use properties, including 16 under development. Its properties encompass an aggregate net leasable area of 46 million square feet.
Other ongoing RioCan projects
RioCan started construction in April on a mixed-use project that will add approximately 170,000 square feet of retail space anchored by a Loblaws City Market and about 500 condominium units over two towers in downtown Calgary’s East Village. RioCan will own the retail area and it sold the air rights above it to residential builder Embassy BOSA for approximately $30 million.
RioCan and KingSett Capital launched construction on the redevelopment of RioCan Yonge-Sheppard Centre that same month. It will add 104,000 square feet of commercial space and include new anchors Longo’s and LA Fitness. It will also include a new 39-storey, 400-unit residential tower that’s expected to begin construction about a year from now.
RioCan and Allied Properties REIT have announced plans to proceed with the development of King-Portland Centre at 602-620 King St. W. in Toronto. Shopify Inc. has committed to occupy approximately 112,000 square feet of gross leasable area, representing approximately 44 per cent of the total space, as the anchor office tenant of the residential, office and retail complex.
Allied will manage the offices and RioCan will manage the retail and residential components after completion, which is scheduled for early 2019.
Sonshine said RioCan has other development and redevelopment projects that he can’t yet talk about.
“There’s a lot of stuff that we’re working on and hopefully over the course of the next few weeks we’ll have some press releases, but nothing that I would venture to say right now.”
This is part two of an article about Riocan REIT. Part one is about RioCan REIT repositioning its Canadian portfolio.