Riocan (Symbol-REI.UN)

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eric
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Riocan (Symbol-REI.UN)

Post by eric »

Seems to be undergoing a bit of a correction this week. While the markets have been down slightly across the board, Riocan appears to be in a bit of a freefall, currently trading @ $21.25 (down 3% today alone). Maybe a buying opportunity in the making?

I have to admit, this is one of my favorite REIT's. Everywhere I go I drive by malls with Riocan's name plastered on the sign out front. I bought in at $18 but then prices skyrocketed and I couldn't bring myself to buy anymore at $23.
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Post by iluvnascar »

Yes, a bit of a correction........but still historically high with a yield of only 6.0%.

That contrasts with Dundee (D.UN) which, although admittedly not quite the quality of REI, is looking better and better and still yields a quite amazing 8.4%.
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Post by randomwalker »

Anyone for just buy and holding the I-Units Exchange Traded Fund for the REIT sector, XRE on the TSE ???
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Post by pitz »

We have a Riocan-owned shopping mall in our community.

It sits 1/3rd empty and the remaining tenants are squeezing them hard for rent reductions.

Many of the former long-term tenants have moved out and into 'big-box' retailling locations, or have just closed up shop all together. The Sears that is contained in it sits pretty much empty (except for employees) the few times I walk in.
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Post by eric »

Interesting Within a 5 minute drive of my office there are two good-sized Riocan operated malls with no vacancies. Certainly doesn't mean its the same in every market, which is why its nice to have an operation scattered across the country and not just in a specific city/market.

Riocan lists their occupancy rate at 97.1% as of Dec 31, 2005, so I have to think most of their malls are running near capacity rather than 1/3 empty. Every market is different, though.
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Post by WC »

I belive the CPP Board is a big holder of RioCan
Can't be all that bad
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Post by sydney2 »

I own Rio Can in at $16.99. Pitz stated upthread that a mall close to his house sits 1/3 empty, where is this, because most of the Rio Can properties in Burlington are thriving, but this does concern me, because retail is having a hard time. :?
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Post by Nemo2 »

I bought into Rio-Can @ $12.20; there are a number of their, apparently thriving, locations in the eastern Ottawa area.
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Post by iluvnascar »

iluvnascar wrote:Yes, a bit of a correction........but still historically high with a yield of only 6.0%.

That contrasts with Dundee (D.UN) which, although admittedly not quite the quality of REI, is looking better and better and still yields a quite amazing 8.4%.

FWIW.....Dundee posted strong results last week and has been the beneficiary of some good press from the brokerage houses. Mgmt has indicated that it will be showing more interest in "road shows" to strengthen the stock price. And note that if it closed the yield gap with Riocan by only 50%, Dundee would be trading at $32.25 (Present Price is $27.41).

Looks to me like this one is a "keeper" with $30 likely in the next 12 months unless the bottom drops out of the economy.....or unless bond yields take off.
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Post by Operabob »

I have it as a DRIP and buy on weakness.

OB
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Post by Arby »

TORONTO, Feb. 27 2006 - Standard & Poor's Canadian Index Operations announces the following index changes effective after the close of business on Tuesday, February 28, 2006:

...RioCan REIT (TSX:REI.UN) will replace Hudson's Bay Company in the S&P/TSX MidCap and the Provisional S&P/TSX MidCap Indices.
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Post by biker »

Riocan down about 13% in a month.Now trading around $21.35 Is this a reflection of concern with their retail tenants do you think?
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Post by scomac »

I have noticed that almost all REITs are down. Riocan hit my radar screen about a week ago. I haven't done much work on it, so I don't have an opinion as to whether it is sectoral or specific.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
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Post by rhenderson »

scomac wrote:I have noticed that almost all REITs are down. Riocan hit my radar screen about a week ago. I haven't done much work on it, so I don't have an opinion as to whether it is sectoral or specific.
It seems to be sectoral as XRE is trading at close to a 52 wk low.

Recession on the way ? :?
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Post by 2 yen »

RioCan is the best of a few really great REITS. (Cominar, Calloway) If it tanks, then the whole sector is in trouble. I own a lot of it and will ride it out. XRE is hard to follow because they change the distribution so often. It is hard to actually work out an annual yield. Anyone know how to solve this problem?
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Post by eric »

In there 3rd quarter report, they make some noise about not currently being a tax exempt REIT, and about a non-cash income tax provision having a major impact on their bottom line.

I thought all REITs were exempt from Flaherty's Halloween massacre?

https://riocan.com/_bin/reports/reports.cfm
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Arby
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Post by Arby »

eric wrote: I thought all REITs were exempt from Flaherty's Halloween massacre?
A REIT must meet certain requirements to be exempt from the Flaherty tax. Some of the REIT requirements are: property holdings must be situated in Canada; 75% of income must be directly attributable to rents. Some existing REITs, (such as hotel REITs and retirement home REITs) will never be able to meet the requirements since a large part of their income is not attributable to rent.

Riocan currently doesn't comply with some of these requirements, (and the same situation applies to many other REITs). Riocan says they will make the necessary changes to comply before the tax changes become effective in 2011. In the meantime, according to GAAP, Riocan is required to show a non-cash tax provision as if they will not comply as an exempt REIT. That non-cash tax provision is merely an accounting entry on the books, and should be reversed on the books by 2011.
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Post by twocentsworth »

And other REITs are doing exactly the same accounting. On the books, but reversible.

REITs are looking tempting now especially considering that a (small) rate cut may be around the corner. Not tempting perhaps to some of us who got in when they were 50% cheaper than today, but tempting compared to their recent highs.
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Post by DavidR »

Anyone know what's going on with Riocan today? Went from 15.50 at about 3 pm to 18.50 at the close. (not that I'm complaining...)
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Riocan

Post by Small Investor Activist »

Overvalued yield should be closer to 10
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Post by Sensei »

Hi,

I've been watching Rio and other trusts in Canada. I think the attraction is because of the underlying business, renting and managing property. I don't think this will suffer as much as other businesses in the downturn. Property is pretty much of a necessity. I haven't picked anything yet, but in the U.S. my favorite is Realty Income. I also have holdings in Developers' Diversified.

Cheers
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Re: Riocan

Post by adrian2 »

Happy Days wrote:Overvalued yield should be closer to 10
Once again, this coming from an expert who has no positive words about any stock / mutual fund / commentator.
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Post by eric »

Its yielding 10% now.
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Post by mpav »

Dude....10% is nothing for reits now the ishare REIT is over 12%, some of the large cap reits are close to, and over 20%.

Insanity...market is pricing in big distrubtion cuts.
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Post by Nemo2 »

Details
RioCan has announced that it has agreed to issue $180mm principal amount
of Series L senior unsecured debentures carrying an 8.33% coupon rate and
maturing on April 3, 2014. Closing is expected on April 3, 2009.
Any comments?
Exit, pursued by a bear.
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