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RIOCAN CONTINUES ACQUISITION DRIVE

Toronto’s RioCan Real Estate Investment Trust purchased 14 more centers in the Canadian market this summer. RioCan made a C$286 million ($181 million) acquisition of a portfolio from Canadian retail developer First Pro Shopping Centres, Toronto, in August. It bought four more centers in September for C$105 million with joint venture partner Kimco Realty Corp. At press time RioCan had purchased a total of 40 centers in 2002, and said it plans to buy more.

RioCan and New Hyde Park, N.Y.-based Kimco also plan to increase the investment in their mall-acquisition venture by C$100 million, to C$500 million. They have so far bought 25 centers together, spending a total of C$300 million, the companies say.

“It has been a particularly good time to buy in Canada,” RioCan CFO Robert Wolf said. “We have a fairly dominant position in Canada in our asset class.” RioCan may soon have to look beyond its home country for more properties, said one analyst. “They’re simply going to run out of reasonable real estate to take over in Canada,” said James P. Tate, vice president of PricewaterhouseCoopers’ Toronto office.

Tate predicts that RioCan will start buying centers in the United States, not least because of its partnership with Kimco, which was formed last year. In July the two bought the 349,000-square-foot Shoppers World Albion and the 325,000-square-foot Shoppers World Danforth, both in the Toronto area, and the 412,000-square-foot Victoria Place, Ontario.

Eight of the centers in RioCan’s FirstPro acquisition are in Ontario, and two are in Québec. Eight are anchored by Wal-Mart, and nine are dominant power centers in small markets in expanding urban neighborhoods; one is an enclosed mall, according to RioCan officials. Two of the centers bought in September are supermarket-anchored properties in Montréal, another is in Toronto, and the fourth is a power center in Whitby, Ontario.

COUNSEL CORP. ENTERS RETAIL ANEW WITH C$54.5 MILLION BUY

Counsel Corp., Toronto, has started buying shopping centers again, a decade after leaving the retail property business. The company has bought five centers in different parts of Canada. The centers, purchased for a total of C$54.5 million ($35 million) and ranging from 64,000 square feet to 218,000 square feet, are located in the provinces of Manitoba, Ontario and Saskatchewan. The company stopped buying shopping centers during the recession of the early 1990s, concentrating instead on acquiring health care and technology assets and on housing for the elderly. Counsel returned to the shopping center business when it saw opportunities outside large, central metropolitan areas, Stephen Weintraub, a Counsel senior vice president, told SCT. Weintraub said Counsel could acquire a total of 20 properties by the end of the year. The company does not plan to make acquisitions in the United States, he added.

HUDSON’S BAY’S DEBT RATING CUT TO JUNK STATUS BY AGENCIES

Hudson’s Bay Co. has had its debt rating cut to junk status by more than one agency, noted The (Toronto) Globe and Mail, making it more expensive for Canada’s oldest and largest retailer to borrow money. Both Dominion Bond Rating Service and Standard & Poor’s downgraded the company. Toronto-based Hudson’s Bay, which owns Bay and Zellers, has about $C689 million ($441 million) in long-term debt.

ROOTS TO ENTER SAKS STORES

Toronto-based sportswear retailer Roots Canada will open in-store boutiques in 52 Saks fashion anchors. Most of the boutiques will be located in the U.S. South and Midwest, with 22 locations in the Chicago area. Birmingham, Ala.- based Saks will place Roots boutiques in its Carson Pirie Scott, Herberger’s and Proffitt’s stores.

FORZANI GROUP TO OPEN SIX STORES IN RIOCAN CENTERS

Sporting goods retailer Forzani Group will open six stores in RioCan Real Estate Investment Trust properties. The stores, to measure 75,000 square feet each, will open in the Ontario cities of Ajax, Brampton, Mississauga, St. Thomas and Timmins, and in Vernon, British Columbia. Plans are also in the works to open three 30,000-square-foot stores on RioCan properties in the future.

SOBEYS TAKES RESPONSIBILITY FOR DAMAGING NOVA SCOTIA RIVER

The Sobeys grocery store chain has taken responsibility for environmental damage to a Nova Scotia river. A water main beneath a former Kmart building on the outskirts of Halifax broke, sending contaminated water into a stream and killing about 4,000 fish. Sobeys has hired an environmental consultant and will try to repair the damage to the river.

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