Loblaw Cos.’ real estate investment trust raised C$400 million ($380 million) in the largest REIT initial public offering in Canada, according to sale documents.
Choice Properties Real Estate Investment Trust, created by Canada’s biggest grocery store chain, sold 40 million trust units for C$10 each, with an initial yield of 6.5 percent, the high end of its marketed range, according to the documents.
Loblaw, based in Brampton, Ontario, created the REIT to spin off about 75 percent of its real estate, according to the documents. Properties include 415 stores, one office complex and nine warehouses totaling 35.3 million square feet.
George Weston Ltd., parent of Loblaw, will acquire an additional C$200 million of the REIT units on completion of the sale, which is led by Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank, the company said. Choice Properties also sold senior unsecured debentures in an offering led by CIBC, Royal Bank, TD and Bank of Montreal.
Julija Hunter, a Loblaw spokeswoman, didn’t immediately return a telephone and email message seeking comment. Kim Lee, who represents the REIT, didn’t return a call seeking comment.
The REIT will trade on the Toronto Stock Exchange under the symbol CHP-UN after the sale closes around July 5.
The C$400 million IPO makes Choice Properties Canada’s largest REIT public offering, surpassing the C$270 million raised in Dundee International REIT’s July 2011 sale, according to data compiled by Bloomberg.
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.