Loblaw Cos. (L)’ real estate investment trust fell 1.1 percent in its trading debut on the Toronto Stock Exchange.
Choice Properties REIT (CHP-U), created by Canada’s biggest grocery store chain, fell to C$9.89 a unit at 9:41 a.m. in Toronto, down from the C$10 IPO price.
Choice Properties raised C$400 million ($378 million) on June 25 by selling 40 million trust units in its IPO, the largest REIT initial sale in the country, according to data compiled by Bloomberg. Loblaw, based in Brampton, Ontario, created the REIT to spin off about 75 percent of its real estate.
Loblaw sold a portfolio of 425 properties indirectly to Choice Properties for about C$7 billion, the company said in a statement today. Loblaw intends to sell the significant majority of its remaining real estate holdings to Choice Properties over the next 10 years.
REITs, which receive preferential tax treatment from the government, are companies that invest in income-producing real estate and pay out most of their income to investors through unit distributions.
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