First Capital Makes Another $116 Million in Asset Sales
First Capital Makes Another $116 Million in Asset Sales
Toronto REIT Almost Two-Thirds of Its Way to $1 Billion Disposition Target
Toronto-based First Capital REIT, one of Canada’s largest retail landlords, has sold another $116 million in assets as part of a plan to sell $1 billion in property.
First Capital, the owner of interests in 22.3 million square feet of gross leasable real estate, first announced its portfolio optimization plan in 2022 with an eye on reaching its sales target in 2024.
To date, First Capital has completed or has under firm agreement approximately $633 million of dispositions under the plan at an average premium to its carrying value under International Financial Reporting Standards, or IFRS, of 21%.
“Our investment team had an outstanding year executing the plan,” said Adam Paul, chief executive of the REIT, on a call with analysts Wednesday. “We can sell the right assets for FCR at big prices.”
The $116 million of new dispositions are subject to firm agreements but include a 50% interest in the Royal Orchard development site, located in Thornhill north of Toronto, the 68-suite Circa Residences in Richmond, British Columbia, a 41.7% interest in 1071 King St. W, in Toronto — reducing the REIT’s interest to 25% — and a small medical office building at 71 King St. W in Mississauga, outside Toronto.
The property sales are subject to all-cash purchase agreements with closing dates from January to March.
For the fourth quarter that ended Dec. 31, First Capital had net income of $173.8 million, compared to $42 million a year earlier. The value of the REIT’s investment properties jumped by $167.6 million in the quarter as demand for retail expanded post-pandemic.
The REIT saw occupancy jump to 96.2% from 95.8% for the same period a year earlier. First Capital also reached an all-time high average in-place rent of $23.34 per square foot.
“There has been almost no new supply of grocery-anchored centres for several years,” said Paul, noting on the call that Canada’s population has continued to climb, driving people to malls. “Fundamentals are solid, and we expect that to continue.”
Michael Markidis, an analyst with BMO Capital Markets, agreed the results were “solid” and expects the company’s leasing momentum to carry into 2024.
Source CoStar. Click here to read a full story.
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