Choice Properties REIT CHP-UN-T and KingSett Capital, a private real estate firm, are teaming up to buy First Capital REIT FCR-UN-T for $5.2-billion.
Based in Toronto, First Capital’s retail-focused real estate portfolio is largely made up of open-air shopping centres in major cities. In total, First Capital’s portfolio value amounts to $9.4-billion, which includes debt.
Choice and KingSett are splitting this portfolio, with Choice buying $5-billion worth of properties and KingSett buying $4.4-billion worth of properties.
First Capital unitholders will receive $24.40 per unit, and the acquisition will largely be paid for with cash, amounting to 79 per cent of the purchase price. The remaining amount will be paid for in units of Choice Properties.
Choice is closely affiliated with Loblaw Cos. Ltd. and was spun out of the grocery giant in 2013 to trade on the Toronto Stock Exchange. Over the last decade the REIT has diversified its revenue mix, including with the acquisition of Canadian REIT.
More to come
