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RioCan to exit London, Ontario, investments

RioCan Real Estate Investment Trust commenced a formal sales process for 10 shopping centers in London, Ontario, marking its exit from the Canadian town, CoStar Group reported, citing broker RBC Capital Markets.

In 2017, the shopping center landlord said it plans to sell more than 100 properties in Canada's secondary markets worth more than C$2.0 billion and focus on its portfolio in the country's six core markets of Toronto; Montreal; Ottawa, Ontario; Vancouver, British Columbia; Edmonton, Alberta; and Calgary, Alberta.

The London portfolio placed on the market comprises nine, open-format centers and one enclosed mall with a total of more than one million square feet of gross leasable area. The 211,514-square-foot Sherwood Forest Mall is the largest asset in the portfolio and accounts for 18.3% of the portfolio's net operating income.

Overall, the centers are 97% occupied for a weighted average lease term of 4.1 years.

RioCan, which was earlier planning a collective sale of all the 10 retail assets as a single package, is now reviewing offers for parts of the portfolio, the May 29 news outlet noted, citing an unnamed source close to the listing.

The Canadian REIT said it has closed or signed contracts to divest C$583.4 million of properties in secondary markets at a weighted average capitalization rate of 6.14% as at May 8, reflecting roughly 29% of its announced disposition target.