RioCan Real Estate Investment Trust (RioCan) has recently announced the news of acquiring 50% co-ownership interest of KingSett Capital’s Canadian Real Estate Home Fund (KingSett) in Yonge Sheppard Centre. The deal has been finalized for around $331 million, the net of a few working capital adjustments.
The two real estate firms have thus come into a purchase and sale agreement. In this transaction, KingSett will be occupying a material equity position in RioCan firm by making an investment of $100 million in the RioCan units. This would be done in a one-year lock-up agreement.
Yonge Sheppard Centre is located at one of the most convenient locations of Ontario, at Yonge Street and Sheppard Avenue, Toronto. And, the transaction would give RioCan a 100% ownership of this urban and classic mixed-use development. Yonge Sheppard Centre spreads across around 1 million sq. ft. of space.
Space will consist of retail space for about 299,000 sq. ft., office space over 401,000 sq. ft. of the area and about 257,000 sq. ft. of space will be dedicated to residential rental space. A 36-storey tower called Pivot, having 361 living units in total is currently in its construction phase at the Centre.
The office, as well as the retail space of the Centre, is undergoing a transformation and is almost in its completed stage now. The facades of the office tower, as well as the shopping center, are being recladded. Also, the interiors of the place are undergoing a transformation too to bring about an urban touch to the Centre. The Centre will turn into a 24-hour hub after once the transformation is completed.
Great avenues like Longo's, LA Fitness, Cactus Club Café amongst other popular food and beverage places are set to open in this ravishing Centre. Apart from these, a community center, day-care, and a Montessori School are also in planning. The residential part of it, Pivot started with its construction in July 2018 and is expected to be completed by July 2020. The location of the residential project is just perfect with easy access facilities, fantastic amenities, and modern design. And, the residential development is sure to become a successive venture under the portfolio of RioCan Living.
This acquisition will expand the reach as well as holding of RioCan Living in the real estate market of GTA. After the closing of the transaction, RioCan will become the holder of two remarkable assets of the region. RioCan recognized the potential of growth in Yonge Sheppard Centre and its impact on the portfolio of the company and thus, decided to etch its name in the great development. Just like the success of Yonge Eglinton Centre, the Centre is expected to follow the same trajectory of success.
In the final transaction that will be held, RioCan will assume the share of around $128 million of KingSett of the property debt that is existing at present. And, it will issue $100 million of RioCan Units out of treasury to KingSett. The two firms will be getting into a one-year lock-up agreement that will commence from the closing transaction date.
The transaction that is subject to customary closing conditions will include the approval of the Competition Bureau of Canada and the Toronto Stock Exchange. The closing of the transaction is expected to happen by August end, in 2019.
Being amongst the leading real estate firms of Toronto, RioCan has an enterprise value that equals to approximately $14.1 billion. The firm is popular for developing residential, retail as well as mixed-use communities. At present, there are more than 230 properties under the portfolio of this reputed firm.
642 King Street West and Fifth & Third East Village are popular urban mixed-use properties by RioCan while The Well condos are an urban condominium development that are gaining high popularity in the real estate sector at the moment. Due to its location, amenities, public transportation options, and the stunning architecture, every person in Toronto would adore the home provided by The Well Condos. Learn more about this development here.