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RioCan to Acquire 50% Interest in Yonge Sheppard Centre from KingSett Capital
Wednesday 12 June 2019

12 June 2019 - Canada-based RioCan Real Estate Investment Trust (TSX: REI.UN) has agreed to acquire 50% co-ownership interest in Yonge Sheppard Centre from KingSett Capital's Canadian Real Estate Income Fund for an estimated CDN 331m (USD 249m), the company said.
The parties have entered into a firm purchase and sale agreement, subject to customary closing conditions. As part of the transaction, KingSett will take a material equity position in RioCan through an investment of USD 100m in RioCan units with a one-year lock-up agreement.
The estimated purchase price, net of certain working capital adjustments, is based on capital costs incurred as of April 30, 2019, which will be further adjusted based on KingSett's share of capital costs incurred from May 1, 2019 to the date of the transaction closing.
As part of the consideration for this transaction, RioCan will assume KingSett's share, or approximately CDN 128m (USD 96m), of the existing property debt and issue CDN 100m (USD 75m) of RioCan units.
KingSett has agreed to a one-year lock up on its RioCan equity investment, commencing from the date of transaction closing.
This transaction, upon closing, will bring RioCan's ownership of this urban mixed-use, transit-oriented property to 100%.
Upon closing, this acquisition will accelerate RioCan's major market and Greater Toronto Area presence and expand the RioCan Living portfolio.
The completion of the transaction is subject to customary closing conditions, including approval by the Competition Bureau of Canada and the Toronto Stock Exchange. The transaction is expected to close by the end of August 2019.
RioCan is one of Canada's largest real estate investment trusts with a total enterprise value of approximately CDN 14.1bn (USD 10.6bn) at March 31, 2019. RioCan owns, manages and develops retail-focussed, increasingly mixed-use properties located in prime, high-density transit-oriented areas.
Date Published: 12/06/2019
Target: Yonge Sheppard Centre/50% stake
Country: Canada
Deal Size: 249m (USD)
Sector: Construction/Real Estate
Type: JV
Financing: Cash
Status: Agreed
Vendor: Canadian Real Estate Income Fund
Buyer: RioCan Real Estate Investment Trust