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Real estate dominating Canadian debt deals

There is a reason you keep seeing stories about powerful Canadian real estate companies, like the Globe's lunch with RioCan's chief executive officer Edward Sonshine, or a sneak peek at what Oxford Properties has coming: these firms are looking to grow.

To do that, they need acquisition funds, which prompted four of them to tap the market for new debt last week. Not only were the funds successfully raised, but all of the issues were upsized, according to Desjardins Securities.

The issuers included RioCan REIT , which raised $225-million to redeem $180-million of outstanding debt that paid 8.33 per cent annually; First Capital Realty , which raised $150-million; Cadillac Fairview Finance Trust, the real estate funding vehicle of the Ontario Teachers' Pension Plan, which raised $2-billion in two parts; and H&R REIT , which raised $180-million.

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At the end of last week, real estate debt comprised about one-third of all new Canadian debt to date in 2011. Taking out the bank issuances, it blows every other sector out of the water.

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

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