RioCan won’t miss Target

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $29.55 (Toronto symbol REI.UN; Units outstanding: 313.9 million; Market cap: $9.2 billion; TSINetwork Rating: Average; Dividend yield: 4.8%; www.riocan.com) should be able to weather Target Corp.’s decision to close its 133 Canadian stores with minimal effect on its revenue and profits. RioCan has Target as its seventh-largest tenant, with 26 locations, but the stores account for just 1.9% of the REIT’s annualized rental revenue. Many of the Target stores are in established malls, so RioCan should be able to rent them to new tenants, perhaps at higher rates. Meanwhile, RioCan says the leases on the 26 locations are guaranteed by the U.S. parent company, Target Corp., for more than a decade. RioCan is still a buy. buy. …