Skip to main content

Canadian Tire’s proposed new REIT will acquire a majority of the company’s real estate.Andy Clark/Reuters

Canadian Tire Corp. is gearing up to transfer 72 per cent of its owned property into a real estate investment trust in an initial public offering that could raise about $260-million.

The company filed its IPO prospectus with regulators on Tuesday with the intention to form CT REIT. The portfolio consists of 256 properties with 19-million square feet of leaseable land. One of those locations is a distribution centre, while the rest are retail locations.

The REIT would hit the market at a time when investor appetite for such investments has been waning. Concerns over rising interest rates have made these higher-yielding real estate investments seem less attractive.

Still, several big Canadian companies are considering spinning off their land into REITs. Hudson's Bay Co., for example, has looked carefully at the strategy, and Loblaw Cos. Ltd.'s Choice Properties REIT brought in $400-million earlier this summer.

Canadian Tire first said it would spin off properties to create a $3.5-billion REIT back in May. The plan was to collect between $175-million and $300-million in proceeds. It would then use the money to fund its expansion.

In its IPO filing, the company stated that it aims to raise gross proceeds of approximately $263.5-million by issuing shares at a price of $10 each. Costs associated with the process are expected to exceed $19-million and the offering should close on Oct. 23.

Canadian Tire is going to be the main tenant in CT REIT and will make up nearly 96 per cent of the base rent next year.

Royal Bank of Canada and the Canadian Imperial Bank of Commerce are the lead underwriters on this IPO.

As for the geographic breakdown, 43 per cent of the land is located in Ontario, with another 28 per cent in Western Canada and 21 per cent in Quebec.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 26/03/24 3:59pm EDT.

SymbolName% changeLast
CTC-T
Canadian Tire Corp Ltd
+0.78%248
L-T
Loblaw CO
-0.25%151.5
RY-N
Royal Bank of Canada
+1.26%100.4
RY-T
Royal Bank of Canada
+1.12%136.23

Interact with The Globe