riocan

SHAWCOR LTD., $24.80, Toronto symbol SCL.A, won two major contracts this week. The company makes sealants and coatings that protect onshore and offshore oil and natural gas pipelines from corrosion. It also makes industrial equipment, such as electrical wire and protective sheaths. One of these new deals is a $400 million U.S. agreement to provide coatings and other services to a natural gas pipeline on the Ichthys gas field off the northern coast of Australia. ShawCor did not say when the work would begin or how long the job would take....

Canada’s real estate investment trusts (REITs) were the only category of trusts exempted from the federal government’s income trust tax. This has helped them remain popular with investors seeking both income and capital gains. Today we examine the expansion plans of the largest of those trusts, a specialist in shopping malls. RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; www.riocan.com) is the largest of Canada’s REITs. It specializes in big-box-style outdoor malls, and owns 314 retail properties, 10 of which are under development. Most are in suburban areas, where land is generally cheaper than in towns and cities....

RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 269.6 million; Market cap: $6.7 billion; Price-to-sales ratio: 5.3; Dividend yield: 5.5%; TSINetwork Rating: Average; www.riocan.com) is Canada’s largest real estate investment trust (REIT). It specializes in big-box-style outdoor malls, and owns 314 retail properties, 10 of which are under development. Most are in suburban areas, where land is generally cheaper than in towns and cities. RioCan also owns 38 malls in the U.S. through a joint venture with Cedar Shopping Centers, Inc. (New York symbol CDR). The trust owns 80% of this joint venture, as well as 14.3% of Cedar. RioCan often leaves room at its malls for expanding existing stores, and building new ones. This makes its easy to add more tenants....

RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Units outstanding: 264.0 million; Market cap: $6.6 billion; TSINetwork Rating: Average; Dividend yield: 5.5%; www.riocan.com) specializes in big-box style outdoor shopping malls. However, over the past few years, the trust has expanded into other developments. For example, RioCan and partner KingSett Capital are now buying the Sheppard Centre in north Toronto. This property includes offices (100% leased), retail stores (96.1% leased) and residential units. RioCan plans to expand the property’s retail and residential portions. RioCan’s share of the $218-million purchase price is $109 million. To help pay for this acquisition, RioCan will issue up to $126.5 million of new units for $24.85 each. The unit issue will increase the trust’s total number of units outstanding by around 2%....

CANADIAN PACIFIC RAILWAY CO., $63.80, Toronto symbol CP, reported higher revenue in its latest quarter. However, earnings fell short of the consensus estimate. In the three months ended September 30, 2011, CP’s revenue rose 4.3%, to $1.34 billion from $1.29 billion. That’s mainly because the company raised its shipping rates and fuel surcharges. In addition, CP shipped more coal and potash during the quarter; that offset lower volumes of manufactured goods and grain. Even with the higher revenue, earnings fell 5.3%, to $186.8 million, or $1.10 a share. That missed the consensus estimate of $1.11 a share. However, costs related to the early repayment of long-term notes cut earnings by $0.04 a share in the latest quarter. A year earlier, the company earned $197.3 million, or $1.17 a share....

Plazacorp Retail Properties Ltd., $4.20, symbol PLZ on Toronto (Shares outstanding: 59.7 million; Market cap: $241.2 million; www.plaza.ca), owns strip malls and enclosed shopping malls throughout the Atlantic provinces, Quebec and Ontario. Plazacorp owns interests in 112 properties, which together contain 5.1 million square feet of leasable area. The Atlantic provinces account for 71% of the company’s square footage, followed by Quebec (24%) and Ontario (5%). The trust’s occupancy rate is 97.4% at the strip malls and 95.9% at the enclosed malls. National chains, such as Shoppers Drug Mart, Dollarama and Staples, account for 89.8% of the Plazacorp’s tenants. In the three months ended June 30, 2011, Plazacorp’s revenue rose 8.4%, to $13.6 million from $12.6 million a year earlier. Cash flow per share rose 7.9%, to $0.068 from $0.063. The company’s long-term debt of $306.9 million is equal to 125% of market cap....

ISHARES CDN REIT SECTOR INDEX FUND $14.20 (Toronto symbol XRE; buy or sell through a broker; ca.ishares.com) holds the 13 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of iShares CDN REIT Sector Index Fund’s value. iShares CDN REIT’s expenses are just 0.55% of its assets. RioCan REIT is the fund’s largest holding, at 25.0%, followed by H&R REIT (12.0%), Canadian REIT (8.9%), Calloway REIT (8.6%), Boardwalk REIT (6.9%), Dundee REIT (6.9%), Primaris Retail REIT (6.2%), Canadian Apartment Properties REIT (6.1%), Allied Properties REIT (4.4%), Cominar REIT (4.4%), Chartwell Seniors Housing REIT (4.0%), Artis REIT (3.7%) and Extendicare REIT (2.0%)....

RIOCAN REAL ESTATE INVESTMENT TRUST $25.57 (Toronto symbol REI.UN; Units outstanding: 264.0 million; Market cap: $6.7 billion; TSINetwork Rating: Average; Dividend yield: 5.4%; www.riocan.com) is Canada’s largest REIT. It has interests in 305 shopping malls in Canada, including 10 under development. These properties contain over 73 million square feet of leasable area. RioCan’s occupancy rate is 97.5%. RioCan also owns an 80% interest in 35 malls in the U.S. through joint ventures. As well, it owns 14% of Cedar Shopping Centers, a U.S. REIT that owns malls anchored by supermarkets and drug stores, mainly in the northeastern U.S. In the three months ended June 30, 2011, revenue rose 12.3%, to $228 million from $203 million a year earlier. Cash flow per unit rose 5.9%, to $0.36 from $0.34. RioCan’s units yield 5.4%....

RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Units outstanding: 263.4 million; Market cap: $6.0 billion; Price-to-sales ratio: 6.0; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) has interests in 305 shopping malls in Canada, including 10 under development. RioCan also owns stakes in 35 malls in the U.S. through joint ventures. In the first six months of 2011, the trust bought or increased its stake in 16 properties. These purchases cost it a total of $230 million ($139 million in Canada and $91 million in the U.S.). That’s 25.7% more than its cash flow of $183 million, or $0.70 a unit, in the first half of 2011. However, these properties have grocery stores and other major retailers as anchor tenants. That cuts their risk. In the current quarter, RioCan plans to spend $245.9 million to buy or raise its interest in 11 more properties....

Homburg Canada REIT, $11.69, symbol HCR.UN on Toronto (Units outstanding: 34.2 million; Market cap: $400.3 million; www.homburgcanadareit.com), owns over 130 income-producing properties in Quebec, Atlantic Canada, western Canada and Ontario. In all, these properties contain 8.0 million square feet of commercial leasable area and 1,725 multi-family residential units. Homburg’s higher-profile holdings include Place Alexis Nihon and the CN Central Station Complex in Montreal, the Confederation Court Complex in Charlottetown and an interest in the PennWest Plaza in Calgary. Homburg Canada began trading at $10 a unit in May 2010. The real estate investment trust has an 8.1% yield....