NCP new position: Riocan REIT (TSX: REI.UN, OTC RIOCF)

Hi everybody,

I thought this morning I would try to write a quick note about Riocan, a name that is very well known to Canadians as it is Canada’s largest publicly traded commercial operator. Riocan is predominantly a retail REIT with some of the best visible locations in high density Canadian cities, an asset class that has been on fire as Canada’s population growth has increased substantially in the past years with very little for new urban retail construction. This has complimented operators like Riocan who have seen record leasing spreads, a trend which continued into the last quarter.

Recently, despite the very strong quarter, Riocan has come under pressure as Hudson Bay Company has announced they have entered creditor protection. Riocan has a joint venture with HBC worth $249 million. Inside the joint venture consists of some of the strongest retail locations in Canada, most of which are reported below current market rents as the leases were signed a number of years ago. Below you can see a summary of which properties are included in the HBC-Riocan joint venture, for those in Canada, several of these are likely instantly recognizable places as they include some of the busiest shopping centers in Canada whose locations are in high demand such as Missisauga’’s Square One or Toronto’s Yorkdale Shopping Centre.

Mar. 17th release from Riocan highlighting the HBC joint venture