Big-city focus cuts RioCan’s risk

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 303.8 million; Market cap: $8.2 billion; Price-to-sales ratio: 6.6; Dividend yield: 5.3%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 230 shopping centres and other rental properties in Canada. That includes 14 projects in development. The overall occupancy rate is a high 96.9%. The trust continues to make progress with its plan to focus on six major urban markets: Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver. By the end of 2019, 90% of its revenue will come from those six cities. As well, properties in the Greater Toronto Area will provide 50% of overall revenue. At the same time, RioCan is reducing its exposure to the retail industry. Under its new RioCan Living division, it’s now building eight projects with a total of 2,300 residential rental units. The REIT plans to begin building a further 2,000 units by 2021. RioCan is a buy. buy. …