Canada's RioCan to step up investment in urban properties: CEO
By John Tilak
CHICAGO (Reuters) - Canada's RioCan Real Estate Investment Trust (REI_u.TO: Quote) is looking to invest about C$1.3 billion ($998.62 million) over the next five years in the development and redevelopment of properties in urban markets, its top executive said this week.
With the pace of rental rate growth slowing and its acquisition strategy taking a backseat, Canada's biggest REIT has been looking for new ways to expand.
"We're budgeting C$250 million per year for the next five years," RioCan Chief Executive Edward Sonshine said in an interview on the sidelines of a BMO Capital Markets real estate conference in Chicago.
The investment in what RioCan calls urban intensification projects would be a sharp increase from recent years, when the average spending was C$100 million to C$150 million per year, he said.
RioCan's expansion strategy calls for transforming some of its assets. This can involve emptying the property, encouraging tenants to leave, tearing down the existing building and constructing new residential, retail or office spaces.
"We're adding a lot of residential to our shopping centers. We're intensifying some of the retail, changing the configuration," Sonshine said. "That's where we see the biggest growth."
The company's biggest urban intensification project underway is The Well, a roughly 3 million square-foot property in downtown Toronto. Continued...