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4-Traders Homepage  >  Equities  >  Toronto Stock Exchange  >  Hudson's Bay Co    HBC   CA4442181018

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RioCan pipeline can offset planned $1.6 billion property sales: CEO

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10/02/2017 | 07:29pm CEST

RioCan Real Estate Investment Trust (>> RioCan Real Estate Investment Trust), Canada's largest property trust, has sufficient development projects in its pipeline to offset its planned C$2 billion ($1.6 billion) sale of shopping malls, its chief executive officer said on Monday.

RioCan Real Estate Investment Trust (>> RioCan Real Estate Investment Trust), Canada's largest property trust, has sufficient development projects in its pipeline to offset its planned C$2 billion ($1.6 billion) sale of shopping malls, its chief executive officer said on Monday.

RioCan will sell about 100 Canadian properties over the next two to three years to focus on Canada's largest cities, and will use half of the expected proceeds of C$1.5 billion to buy back shares, the Toronto-based company announced earlier on Monday.

It did not identify the properties it intended to sell.

RioCan is seeking to boost rental income growth by focusing on key population centers in Canada as store closures and bankruptcies hit mall owners.

Six cities, including Toronto, Ottawa and Calgary, will account for 90 percent of annual rental revenue after the sales, up from 75 percent now, RioCan said, adding that the move would boost same property net operating income by 3 percent annually.

"The properties we intend to sell are solid, reliable income properties, (but) their annual net operating income growth lags the growth we're able to achieve in our primary market portfolio," RioCan Chief Executive Edward Sonshine said in a conference call.

"At the same time, the current phase of our development program will have sufficient completions over the next few years to more than make up for that which we will be selling."

RioCan will suspend its dividend reinvestment plan from Nov. 1, and continue to invest between C$300 million and $400 million per year into its development pipeline in the six major cities.

The company has received interest from potential buyers, including other REITs, private investors and some small pension funds, for the properties it intends to sell, Sonshine said. More than 90 percent of the properties identified for sale are owned by RioCan, he said.

RioCan is also a partner in one of Canadian department store operator Hudson's Bay Co's (>> Hudson's Bay Co) real estate joint ventures.

Last year, RioCan raised C$1.2 billion by selling 49 retail properties in the United States to focus on its Canadian business.

($1 = 1.2486 Canadian dollars)

(Reporting by Nichola Saminather; Editing by Paul Simao)

By Nichola Saminather

Stocks treated in this article : RioCan Real Estate Investment Trust, Hudson's Bay Co
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Financials ( CAD)
Sales 2018 14 531 M
EBIT 2018 -210 M
Net income 2018 -410 M
Debt 2018 2 787 M
Yield 2018 0,92%
P/E ratio 2018 -
P/E ratio 2019
EV / Sales 2018 0,34x
EV / Sales 2019 0,32x
Capitalization 2 164 M
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Mean consensus HOLD
Number of Analysts 11
Average target price 13,9  CAD
Spread / Average Target 17%
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Managers
NameTitle
Gerald L. Storch Chief Executive Officer & Director
Richard A. Baker Executive Chairman & Governor
Edward J. Record Chief Financial Officer
Janet M. Schalk Chief Technology Officer
Robert C. Baker Director
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