Loblaw plans to create one of Canada’s largest real-estate investment trusts
Posted December 6, 2012 8:53 am.
This article is more than 5 years old.
The country’s biggest grocery-store chain is planning to create what will be one of the biggest real-estate investment trusts (REIT).
Loblaw said it is planning the REIT in a bid to unlock shareholder value of its properties.
The company has upward of 47-million square-feet of real estate, potentially worth upward of $7 billion . Executives feel that property is not being reflected in its stock-market value, however.
To improve that, it is planning to put more than $7-billion worth of that property into a real-estate investment trust, which will be spun-off in an initial public offering (IPO).
Loblaw will then lease back the space in long-term deals.
Galen Weston, executive chairman of Loblaw Companies Limited, said the move will help the grocery chain focus on its core business in what is a highly-competitive market.
Loblaw stock, year-to-date, is down approximately 12 per cent.