H&R real estate investment trust has reached a deal to sell 63 U.S. retail properties for US$633-million, slashing its exposure to the retail sector across dozens of American cities.
The sale of mostly grocery and drug store properties is part of H&R’s strategy to simplify its portfolio and focus on fewer assets, including its offices and residential buildings.
The deal does not include H&R’s 16 U.S. gas stations and convenience stores. H&R did not disclose the buyer of the buildings. Calls and emails to trust seeking comment were not immediately returned.
H&R said sale proceeds will be used to repay its mortgage debt, repurchase units and fund its multi-residential Lantower project in southern U.S.
Developing multi-residential, or apartments, has become key to H&R’s growth as well as other Canadian investment trusts such as Canada’s biggest mall owner RioCan.
Retail-dominated real estate investment trusts have witnessed their unit prices underperforming on stock exchanges. H&R’s units are trading at $20.59 in Toronto, down 7 per cent compared with a year ago.
H&R’s web site says it owns 37 offices, 152 retail buildings, 91 industrial properties, 17 residential properties and 4 development projects.
Rachelle Younglai