RioCan updated December 17, 2022

RioCan Real Estate Investment Trust is updated and rated Buy at $21.07.

This is a relatively lower risk investment but it is also not a very high ROE investment. It has a great portfolio of properties with 53% located in metro Toronto and almost all the rest in the next five biggest cities. It’s shopping centers are largely in the category of outdoor “Power centers” with only 5% being traditional enclosed shopping malls. It has a strong group of tenants as well with a heavy focus on grocery stores and other essential retailers including value retailers.  Traditionally almost entirely devoted to retail tenants it is now building a strong presence in residential apartments mostly in Toronto. And it is also building and selling condos and Townhouses. It’s a very well managed outfit.

While there are some headwinds including higher interest rates, the timing looks good here with the units trading at 81% of book value. I suspect that the distribution currently yielding 4.8% will be increased early next year.


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