RioCan ponders foreign growth
Real estate trust eyes work in Britain, U.S. Few sites for big-box centres here, CEO says
Canada’s RioCan Real Estate Investment Trust is considering an international expansion, chief executive Ed Sonshine says.
His comments yesterday come a day after RioCan, Canada’s largest real estate trust, announced it is spending $253 million with its joint-venture partner on five new shopping centres. It also comes days after FirstPro Shopping Centres announced it was taking its big-box strip mall developments overseas.
“ Inevitably, we will probably have to look outside of Canada,” Sonshine told reporters yesterday at the International Council of Shopping Centres conference in Toronto. He added that RioCan has not developed any international plans yet, but “in previous years we weren’t even open to thinking about it.”
Sonshine cited many factors that are conspiring to hinder the development of big- box strip malls in Canada, including bureaucratic red tape at municipalities across the country and a general lack of sites in well- populated areas. He said it’s taking longer and longer to complete a project and he believes municipalities don’t favour the developments because “ they’re not pretty,” citing asphalt and Wal- Marts. Consumers wish to shop at them but not live beside them, he said.
Sonshine noted that some traditional power centre retailers, such as Winners, have established sites in enclosed malls because they can’t get the openair locations — the cheaper alternative — they want. As RioCan attempts to deal with a lack of land for its projects, one solution will be “ building up,” Sonshine said. He cited a Vancouver project that RioCan announced recently, where Canadian Tire and Best Buy were squeezed onto less than half a hectare of land, in a building four storeys high.
“ That’s what you’re going to see happening," Sonshine said.
Another solution could be international expansion. The CEO said he favours English- speaking countries, including the United States and Britain.