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RioCan, Tanger buy two Montreal-area outlets

RioCan, Tanger buy two Montreal-area outlets


Deal valued at $94.7 million

TORONTO — RioCan Real Estate Investment Trust (TSX: REI.UN) and Tanger Outlet Centers Inc. are going ahead with the purchase of two outlet centres in the Montreal area for $94.7 million.

The co-owners announced Tuesday that they will share the cost of buying Les Factoreries St. Sauveur and Bromont Outlet Mall on a 50-50 basis.

RioCan will provide development and property management services and Tanger will provide leasing and marketing services.

The co-owners intend to add value to the properties by implementing their operational and marketing programs and rebranding the properties under the Tanger Outlets flag.

The purchase price includes the assumption of the aggregate in-place financing at Les Factoreries St. Sauveur of $18.8 million.

Both transactions are scheduled to close in November, enabling the co-owners to expand beyond the Greater Toronto Area.

Les Factoreries St. Sauveur is about 60 kilometres northwest of Montreal, while the Bromont Outlet Mall is some 85 kilometres east of Montreal.

“We are very pleased to expand our co-ownership with Tanger and bring our collective expertise into a second market with two well established, well located properties that will bring the Outlet Center experience to the Montreal area,” said RioCan CEO Edward Sonshine said.

“We are also seeking to add a new centre in the Ottawa market which will provide our tenants with the opportunity to be in multiple locations across Canada,” Sonshine added.

RioCan already had a joint venture with Tanger to develop U.S.-style outlet centres in Canada and bought the Cookstown Outlet Mall north of Toronto for the first project. The partners also agreed to acquire 20 hectares in the Ottawa suburb of Kanata and develop it into a Tanger Outlet Center.

RioCan announced a deal with Tanger and landlord Orlando Corp. last April to develop designer outlets at the Heartland Town Centre in Mississagua, Ont.

Toronto-based RioCan is Canada’s largest real estate investment trust with a total capitalization of $13.6 billion. It owns and manages Canada’s largest portfolio of shopping centres with interests in 336 retail properties containing an aggregate of 79.4 million square feet, including 48 grocery anchored and new format retail centres containing 12.3 million square feet in the United States.

Tanger Factory Outlet Centers Inc. (NYSE: SKT), with headquarters in Greensboro, N.C., owns and operates or has an ownership interest in 40 upscale outlet shopping centres in 25 states coast to coast and in Canada, totalling approximately 12.3 million square feet.