Urban focus enhances RioCan’s prospects

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units o/s: 304.6 million; Market cap: $7.6 billion; Price-to-sales ratio: 6.5; Dividend yield: 5.8%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 233 shopping centres and other rental properties in Canada. That includes 16 projects in development. The overall occupancy rate is a high 97.1%. The REIT recently announced a new plan to focus on six major urban markets: Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver. Six cities will supply 90% of revenue As part of that strategy, it plans to sell 100 properties for a total of $1.5 billion (net of transaction costs). So far, the trust has sold (or has firm deals to sell) $1.3 billion worth of those properties. When it completes the plan in 2020, its six target cities will account for 90% of its rental revenue compared to 85.4% in 2018. RioCan’s revenue rose 12.7%, from $1.03 billion in 2014 to $1.16 billion in…

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