Better Land Use Could Expand Profits

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $23 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) earned $0.20 a unit (total $39.6 million) from continuing operations in the three months ended June 30, 2006, up 11.1% from $0.18 a unit ($36.1 million) a year earlier. However, the year-earlier quarter included $5.0 million in writedowns and other charges. Cash flow per unit grew 2.9%, to $0.35 from $0.34, while revenue rose 2.7%, to $155.4 million from $151.3 million. RioCan’s big box style shopping malls continue to attract long-term tenants. Its occupancy rate in the most recent quarter rose to a record 97.3%. National chains and anchor tenants accounted for 83% of its rental revenue, which cuts its risk. The trust is now concentrating on making better use of the land at its existing properties. RioCan already owns the land, so expanding its current malls is cheaper than building new ones. That should free up more cash for distributions. The current annual…

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