RioCan confides US realty sector

Whatever may be the debacles in the US realty sector, RioCan, Canada’s largest shopping mall operator, is full of hope and is also on the verge of seeking additional deals in the United States in the next three to five years following inauguration of its first investment south of the border earlier this week. As per REIT, it has already forged a $181 million alliance with Cedar Shopping Centers, taking a minority stake in the U.S. company and creating a joint venture on 124 shopping centers in the northeastern and mid-Atlantic states.

Speaking on this, Edward Sonshine, Chief Executive of RioCan Real Estate Investment Trust, stated in the conference call with analysts, “We intend over the next year or so to take advantage of what we believe is a once-in-a-decade opportunity to buy quality properties on an accretive basis, to be able to do this in a North American field, rather than Canada alone.” “It enables us to pick the absolute best opportunities from a much larger pool,” he said a day after the company posted a 66 percent decline in funds from operations.

It is to be noted that RioCan, prominent owner of more than 200 properties in Canada, has mostly stayed away from acquisitions for almost four years, but now expects to lay the foundation for a major expansion. For the time being, any deals are expected to take the form of joint ventures rather than outright acquisitions.

In accordance with Edward Sonshine, he would not look forward to the REIT’s assets to be more than 20 to 25 percent outside of Canada. The Cedar deal represents about 2 or 2 1/2 percent, he said. What is more, as per him, the trust likes to handle public companies for the reason that it is more contented with their transparency but it might also consider deals with closely held companies.