# Choice Properties Real Estate Investment Trust (CHP.UN)



## Addy (Mar 12, 2010)

*Choice Properties REIT*

Price $10 per unit, min 1000 units. Settlement date of ~ July 5th. Is anyone else here following this one?


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## CanadianCapitalist (Mar 31, 2009)

Hard to get excited because Loblaws is selling at close to the peak of the cycle.



> Choice Properties Real Estate Investment Trust, the REIT created by Loblaw Cos. (L), is targeting a yield payout of 6 percent to 6.5 percent for its C$400 million ($390 million) initial public offering, according to sale documents.


http://www.bloomberg.com/news/2013-06-06/loblaw-s-choice-properties-reit-targets-6-to-6-5-yield.html


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## HaroldCrump (Jun 10, 2009)

So this is the Loblaws spin-off...I was wondering since I hadn't heard the name before, I was going to look into it.
This is part of the REIT bubble with all major retailers spinning off their properties.
Canadian Tire and The Bay are next in line.

I wouldn't touch this one for several reasons.


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## doctrine (Sep 30, 2011)

Are there earnings reports out? You should at least have an idea of earnings that you can compare against the dividend.


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## HaroldCrump (Jun 10, 2009)

I believe this is still at the IPO stage.
I am sure there will be some AFFO payout ratios forecasts in the prospectus.


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## Hawkdog (Oct 26, 2012)

Anyone receive an invite to this IPO? I am think about putting in 5 grand. 

Choice Properties Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust and was formed primarily to own income-producing commercial properties located in Canada. It will be primarily focused on managing and acquiring supermarket-anchored shopping centres, stand-alone supermarkets and other retail properties. 

Investment Overview:

The portfolio of properties to be acquired by the REIT from Loblaw Companies Ltd. on closing will consist of 425 properties totaling 35.3 million square feet of gross leasable area ("GLA"), comprising 415 retail properties, one office complex and nine warehouse properties ("the Initial Properties").
The Initial Properties represent approximately 75% of Loblaw's owned real estate.
Loblaw will be the REIT's most significant tenant for the foreseeable future, representing approximately 91% of its annual base minimum rent and 88% of its GLA on closing.
As of closing, the REIT's leases with Loblaw will have a weighted average remaining lease term of 14 years, with a range of 10 to 18 years.
The retail properties will be made up of (i) 267 properties with a stand-alone store operating under a banner owned or licensed by Loblaw or certain of its subsidiaries, (ii) 143 properties anchored by a store operating under a Loblaw-Owned Banner that also contain one or more thirdparty tenants, and (iii) five properties containing only third-party tenants. The office complex consists of two office buildings and the warehouse properties include two properties that host three warehouses each.
In addition to the offering of Units to the public, George Weston Limited, the parent of Loblaw, will acquire $200 million of Units on closing.
The objectives of the REIT are to: (a) provide Unitholders with stable, predictable and growing monthly cash distributions on a tax-efficient basis; (b) enhance the value of the REIT's assets in order to maximize long-term Unitholder value; and (c) expand the REIT's asset base while also increasing its AFFO per Unit, including through accretive acquisitions and site intensification.

Initial Expected Yield: 6.00% - 6.50% per annum, (the initial yield will be set during the week of June 25, 2013). The REIT intends to pay stable, predictable and growing monthly cash distributions of a portion of its available cash to holders of Units. The distribution of cash to Unitholders is not assured.

Application has been made to list the Units on the Toronto Stock Exchange under the symbol CHP.UN.


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## Hawkdog (Oct 26, 2012)

Thanks for moving this, missed that thread.


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## HaroldCrump (Jun 10, 2009)

I would be circumspect.
As a stock, it will be heavily concentrated into the hands of the Weston family.
Which creates limited ownership and influence opportunities for large institutional shareholders.
Resale of the company in the future, even at a premium, is also doubtful because of this structure.
The REIT will have very limited power to increase rents or negotiate better terms for itself.

This is basically the Loblaw insiders and family cashing out, riding the REIT bandwagon.

However, if you are still interested, I suggest wait until it starts trading instead of acquiring through the IPO.
Given the selloff in the entire REIT sector both in the US and Canada since late May, chances are this might drop below its IPO price after it starts trading.


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## andrewf (Mar 1, 2010)

Look at this like Crombie. 

It seems to me that the purpose of the structure is to put a hard value on the real estate assets, which the company may have thought were undervalued by the market. I don't know how else to explain the pop in the stock price since they announced.


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