RioCan's retail occupancy rate hits a record 98.9%

BNN Bloomberg reported that RioCan Real Estate Investment Trust, a landlord of retail property let to grocery stores and pharmacies, hit a record retail committed occupancy rate of 98.9% in the third quarter. That is the share of leasable retail space that is occupied or under signed lease; a year earlier it was 98.4%. Low supply of new space and strong demand from retailers drove it. Chief executive Jonathan Gitlin said Loblaw, Walmart, Costco and Dollarama are competing for more space.

New space is also costly to build. Mr Gitlin said building retail space costs about $600 per foot, and average rent would need to reach $45 per square foot for new projects to make economic sense. Net rent on new leases, a related measure, was $31.45 in the third quarter, up 32% from a year earlier, but that is still $13.55 below $45.

But the trust’s profit swung to $122.6 million from a loss of $120.3 million a year earlier, even though revenue fell to $304.8 million from $371.2 million.

Sources: BNN Bloomberg