H&R REIT completes enclosed mall portfolio spinoff

H&R Real Estate Investment Trust finalized the spinoff of its enclosed shopping mall business and certain other assets to a new stand-alone, publicly traded REIT, Primaris Real Estate Investment Trust, on Dec. 31, 2021.

The internal reorganization was implemented through a statutory plan of arrangement whereby H&R's unit holders received one Primaris unit for every four units they held immediately before transaction closing.

The Canadian diversified REIT contributed 27 assets with an appraised value of roughly C$2.4 billion, which, net of debt, equates to a net asset value of the Primaris spinoff of C$5.57 per H&R unit prior to any working capital adjustments.

The properties were secured with debt amounting to about C$723 million.

Primaris also purchased eight additional properties with an appraised value of C$800 million from the Healthcare of Ontario Pension Plan, or HOOPP, bringing its portfolio to 35 assets with an appraised value of approximately C$3.2 billion as of Sept. 30, 2021.

About 98.25 million Primaris units and approximately 3.34 million exchangeable units, or roughly 101.6 million units in total, were issued as part of the arrangement and the HOOPP transaction. Of that total, H&R unit holders and HOOPP received about 74% and 26% of Primaris' units, respectively.

H&R units will continue to trade on a "due bill" basis through market close Jan. 4. The units will trade on an "ex-distribution" basis and will resume regular trading without any "due bill" entitlement at market open Jan. 5.

Primaris units will start trading independently on the Toronto Stock Exchange under the symbol PMZ.UN on a regular-way basis at market open Jan. 5.