CanReit acquires 8 Canadian Tire stores
Written on September 9, 2008
Two Toronto-based commercial real estate owners have acquired 11 retail properties from Canadian Tire Corp.
Canadian Real Estate Investment Trust announced yesterday it has acquired eight properties from the hardware and household goods retailer for $137.3 million, while Charter Real Estate Investment Trust acquired three properties for $27.3 million. One other site put up for sale in August has been acquired by an undisclosed private company.
The eight properties acquired by CanReit are in British Columbia, Alberta, Ontario, Quebec and Nova Scotia. The three acquired by Charter REIT are in Ontario.
The purchase is part of a Canadian Tire transaction announced in mid-August to sell and lease back 12 of its store properties for $174 million. At the time, the company did not identify the buyer or buyers until the sale and leaseback closed.
Adam Paul, vice-president of investments at CanReit, called the properties "great quality real estate" that work well with the company’s commercial portfolio.
One is a Canadian Tire store integrated within the Dartmouth Crossing shopping centre in Dartmouth, N.S., in which the trust has a 50 per cent stake.
Paul said the deal will allow CanReit, which owns 150 retail, industrial and office properties in Canada, to "build up critical mass" in certain markets.
The properties acquired by Charter REIT are leased for a 15-year term to Canadian Tire.
Charter REIT also announced it will reduce annual distributions to 16 cents per unit from 31 cents, starting this month cashadvance.
Yesterday’s deal continues Canadian Tire’s moves to cash in on extensive real estate assets. The company recently sold an Ottawa store property for $40 million to RioCan Real Estate Investment Trust, Canada’s largest shopping mall owner, in a sale-leaseback deal. The retailer operates 1,170 general merchandise retail stores and gas stations across Canada. It owns about 74 per cent of its stores and leases the rest.
In trading, CanReit units initially gained 1.3 per cent on the news, but closed 6 cents lower at $29. Charter units lost 5 cents to close at $1.95.
Canadian Tire stock rose 85 cents to $52.25, a gain of 1.65 per cent.
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