Big retailer prepares new real estate investment

Canadian Tire expects to complete the Initial Public Offering (IPO) of the REIT in the fall of 2013, according to the company's latest quarterly financials, released Thursday. That is, of course, subject to prevailing market conditions and regulatory approvals, including listing approval for the Toronto Stock Exchange.

Investors have eagerly looked forward to the offering since Canadian Tire declared its intentions in the first quarter. The move mirrors that of Loblaw and other retail titans now looking to make money off their existing retail properties. Those buildings are then leased back from the REITs.

Canadian REITs remain the darling of equities investors, although real estate investors have been a tougher nut to crack. Many prefer to buy and hold property instead, but a dearth of suitable, cash-flowing properties on the market is forcing some property devotees to switch up their formula.

The relatively high yields of many Canadian REITs continues to attract investors as well as a growing number of players looking to their own IPOs.

As CREW reported earlier this year, for the first time in a decade, this country’s bustling mining sector failed to produce any initial public offerings for either the TSX or TSX Venture exchange during the first three months of the year.

Only the real estate sector came to the market during Q1, with three IPOs for the TSX in Q1, raking in a total of $422 million, says the PwC survey.

That change in the status quo is likely to continue, says experts, pointing to the continuing strength of the real estate sector and investor demand that extends beyond brick-and-mortar purchases.

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