RioCan Real Estate Investment Trust (TSX: REI.UN) has entered into firm agreements to sell its 50% ownership interest in four RioCan Living residential rental properties. These sales, including the previously announced Q4 2024 disposition of the Strada property, are expected to generate gross proceeds of approximately $197.3 million. Additionally, RioCan is in advanced negotiations to sell another residential asset in Toronto. All transactions are expected to close by Q3 2025, with valuations consistent with the Trust’s IFRS book values.
As of Q1 2025, the RioCan Living portfolio included 13 income-producing properties and two under development, with a total estimated value of $1.0 billion. RioCan’s strategy involves unlocking the value of this portfolio over the next 12 to 24 months by selling either individual assets or groups of properties.
Strategic Focus and Business Simplification
President and CEO Jonathan Gitlin stated, “With RioCan Living, we’ve built a portfolio of high-quality, transit-oriented, mixed-use assets in key Canadian markets. Now that the platform has reached scale, our focus is on realizing its full value through strategic dispositions. This move enhances our financial flexibility and allows us to concentrate on our core retail business.”
Post-sale, the RioCan Living portfolio will consist of nine income-producing properties and two under development, with an adjusted valuation of approximately $900 million. Interest in the remaining assets remains strong.
Key Benefits of the Dispositions:
- Value Realization: These sales confirm the value created through RioCan’s development efforts.
- Capital Recycling: Proceeds will be used to reduce debt and support the Trust’s Normal Course Issuer Bid (NCIB). In 2025, RioCan repurchased 5.5 million Units at an average price of $17.99, totaling $100 million (pre-tax).
- Value Validation: Transactions affirm the Trust’s IFRS valuations and reflect demand for RioCan Living’s portfolio.
- Simplified Operations: Divesting residential assets streamlines RioCan’s focus on stable, income-generating retail properties.
- Improved Debt Metrics: Buyers will assume existing CMHC-insured mortgages, improving RioCan’s Unsecured Debt to Total Contractual Debt ratio, projected to rise to approximately 60% from 57.3% in Q1 2025.
RioCan continues to execute its monetization plan with discipline and remains confident in unlocking additional value from its remaining residential assets.
RioCan Living Asset Monetization Update:
| Status | Properties | Location | Purchaser | Closing Date | Total Gross Sale Proceeds (in $ millions) | |||||
| Closed | Strada | Toronto, Ontario | CAP REIT | Q4 2024 | $23.9 | |||||
| Firm | Brio | Calgary, Alberta | Boardwalk REIT | Q3 2025 | $37.4 | |||||
| Firm | Frontier, Latitude & Luma | Ottawa, Ontario | Killam Apartment REIT | Q3 2025 | $136.0 | |||||
| TOTAL | $197.32 | |||||||||
About RioCan
RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at March 31, 2025, our portfolio is comprised of 177 properties with an aggregate net leasable area of approximately 32 million square feet (at RioCan’s interest).
