Canadian REIT capital market activity up 6% in 2023

Editor's note: This article is updated on a quarterly basis and was last published Oct. 27.

Publicly traded Canadian real estate investment trusts raised a total of C$3.77 billion through capital offerings in 2023, up 6.0% from the C$3.55 billion collected a year earlier.

Debt offerings accounted for C$3.31 billion of capital raised, while about C$450.4 million was collected through common equity offerings.

Retail REITs get majority share of capital

The retail sector, consisting of shopping centers and other retail properties, accounted for the biggest share of capital collected in 2023 at C$2.58 billion, about 68.5% of the year's total offerings. The industrial sector came in second at C$759.5 million, followed by the multifamily segment with C$306.9 million.

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Choice Properties REIT pulls in most capital

The single largest common equity offering for the entirety of 2023 was multifamily-focused Boardwalk REIT's C$250.9 million offering completed Dec. 22. Meanwhile, retail REIT Choice Properties REIT 's C$550.0 million offering, which wrapped up March 1, was the largest debt offering completed during the year.

Choice Properties REIT collected the most amount of capital overall in 2023 through two debt offerings valued at C$900.0 million in aggregate. Shopping center-focused RioCan REIT came in second, pulling in a total of C$800.0 million through three debt offerings.

Capital offerings activity up by almost fivefold YOY in Q4 2023

Following strong activity in the third quarter, Canadian REITs' capital market activity slowed during the fourth quarter, raising a total of C$650.9 million. This was a 43.3% decline from the amount raised in the previous quarter but was actually a steep rise from C$131.3 million collected during the same quarter in 2022.

During the fourth quarter, Boardwalk REIT raised C$250.9 million through a follow-on common equity offering. The REIT intends to use the proceeds of the offering to finance the purchase price of The Circle, a 295-suite newly built apartment complex in Calgary, Alberta, that Boardwalk REIT recently agreed to acquire; to repay its portion of a floating-rate construction facility on the 45 Railroad community in Brampton, Ontario; and to fund other future acquisition and development opportunities in the REIT's existing pipeline.

Meanwhile, industrial-focused Granite REIT sold C$400.0 million worth of 6.074% series 7 senior unsecured debentures due April 12, 2029. These debentures were the REIT's third green bond issuance under its Green Bond Framework. The company intends to use the net proceeds of the sale to finance expenditures associated with green projects. Initially and before the full allocation, the proceeds will be used to refinance its existing debt, which includes the series 3 senior unsecured debentures due Nov. 30, 2023, as well as for general corporate purposes.