RioCan enters joint venture to develop designer outlets at Toronto-area mall

TORONTO – Toronto’s RioCan Real Estate Investment Trust (TSX:REI.UN) has a joint venture deal with two real estate firms to develop designer outlets in a Toronto-area power mall.

RioCan, along with Canadian developer and landlord Orlando Corp. and U.S.-based Tanger Factory Outlets (NYSE:SKT) said Wednesday they will develop designer outlets at Mississauga, Ont.’s Heartland Town Centre for an undisclosed price.

The companies plan to add another 312,000 square feet to the centre’s two million square feet of big-box retail space.

“The formation of this venture joins three very substantial organizations who will align their respective talents and resources in identifying and executing a formidable outlet property within the very successful Heartland Town Centre,” said Ed Sonshine, CEO of RioCan REIT.

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RioCan already has 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 have also struck a deal to acquire 20 hectares in the Ottawa suburb of Kanata and develop it into a Tanger Outlet Center.

Tanger Factory Outlet Centers, headquartered in Greensboro, North Carolina, operates and owns, or has an ownership interest in, a portfolio of 39 upscale outlet shopping centers in the U.S. and Canada.

RioCan is Canada’s largest real estate investment trust with a total capitalization of $12.5 billion at Dec. 31. It owns and manages 331 retail properties.

RioCan has said roughly half of the acquisitions the trust will make this year will be in the U.S. RioCan has committed to keep its U.S. exposure to 20 per cent of its overall business. Sonshine said the trust still has considerable room for growth south of the border, where it began expanding in 2009.

The trust made 38 acquisitions in Canada and the U.S. in 2011 and has also become the biggest landlord for Target Stores in Canada as the big U.S. retailer prepares to launch its department stores here over the next year or so.