RioCan, Kimco to wind up pan-Canadian real estate partnership in stages

TORONTO – The RioCan and Kimco real estate businesses are unwinding their Canadian partnership, which jointly owns 35 properties in six provinces.

RioCan Real Estate Investment Trust (TSX:REI.UN) will pay $715 million to acquire Kimco Realty Corp.’s stake in 22 of the properties and assume Kimco’s share of their existing debt.

The properties in this group — primarily shopping centres, plazas and power centres in British Columbia, Ontario, Quebec and Alberta — will be transferred to RioCan in two phases, to be completed by the first quarter of 2016.

RioCan and Kimco will also seek to dispose of 13 additional institutional-quality retail properties, including the Halifax Walmart Centre in Nova Scotia and Charlottetown Mall in Prince Edward Island.

They expect to have 10 of those properties sold by the second half of 2016 and three — which housed Target Canada stores — at a later date.

RioCan chief executive Edward Sonshine said it’s a rare opportunity to acquire a large number of properties that can be easily absorbed by the real estate trust.

“This acquisition improves RioCan’s Canadian portfolio by increasing the concentration of the trust’s portfolio located in Canada’s six largest markets, most notably in the Greater Toronto Area,” Sonshine said.

Kimco chief executive Dave Henry says the divestment continues efforts to simplify its operations “and provides an important source of capital to fund redevelopment activities and further strengthen our balance sheet.”