REIT Watch: Loblaw’s Choice Properties Targets 6-6.5% Yield in C$400 Million IPO

on Jun 14, 2013
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**Choice Properties REIT Targets 6-6.5% Yield in C$400 Million IPO**
Choice Properties REIT, a real estate investment trust created by Canada’s biggest grocery chain Loblaw (TSE:L), is pitching itself as a bargain in a slumping REIT market.
Choice Properties is targeting a yield of 6-6.5 percent in its C$400 million (₤251 million) initial public offering this month. “On first blush and all else being equal, this looks like a fairly attractive REIT,” Brian Huen, managing partner at Toronto-based Red Sky Capital Management, told Bloomberg in a telephone interview. “Despite the current challenging environment we’re in, I think they’re pricing this properly.”

With a price of about C$10 apiece and yield of 6.25 percent, the REIT would trade at 11.4 times funds from operations. That’s below the 13.8 multiple for Crombie REIT, 15.4 for Calloway REIT and 17.3 for RioCan.
Choice Properties plans to use the proceeds from the IPO to acquire about 75 percent of Loblaw’s properties – 415 stores, one office complex and nine warehouses. The assets total about 35.3 million sq. ft. of leasable area but investors should be cautious as Choice Properties would be heavily reliant on

Loblaw as both the main tenant and dominant stakeholder.
Following the IPO, Loblaw will most likely retain about 90 percent of the ownership in the REIT, which will have an initial market capitalisation of between C$3.6 billion and C$3.9 billion (₤2.26-₤2.45 billion).
BTB Announces June Dividend of C$0.0333
BTB REIT (CVE:BTB.UN), a real estate investment trust investing in commercial, office and industrial properties, announced on Friday, June 14, that it would distribute a dividend of C$0.0333 for the month of June. The dividend will be paid on July 15 to shareholders of record on June 28.

**Northstar and Goldman to Pay $925 Million for 25 Property Funds**
!m[Northstar and Goldman to Acquire 25 Property Funds for $925 Million](/uploads/story/3098/thumbs/pic1_inline.jpg)
NorthStar Realty Finance (NYSE:NRF), a real estate investment trust that originates, acquires and manages portfolios of real estate debt, and a Goldman Sachs fund are spending $925 million (₤591 million) to purchase limited partner interests in 25 property funds from New Jersey’s pension fund. According to

Timothy Walsh, director of the New Jersey state treasury’s division of investment, the soon-to-be-acquired funds own various positions of real estate debt and equity, primarily in the U.S.
Northstar and Goldman will initially pay $510 million (₤326 million) and the remaining $415 million (₤266 million) over four years, according to a filing with the U.S. Securities and Exchange Commission on Wednesday.
**Loblaw’s share price was C$48.29 as of 14.06.2013, 14.20 BST.**
**BTB REIT’s share price was C$0.930 as of 14.06.2013, 14.20 BST.**
**Northstar Realty Finance’s share price was $8.85 as of 14.06.2013, 14.20 BST.**

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