waived to acquire Cookstown Outlet Mall on a co-ownership basis.
The co-owners expect to acquire the property on a 50/50 basis at an anticipated purchase price of $62 million (Canadian dollar, at 100%), which includes the consideration paid for excess density. RioCan will provide development and property management services and Tanger will provide leasing and marketing services. The joint venture will assume the in place financing of $30 million (Canadian dollar) which carries an interest rate of 5.1% and matures in 2014.
Cookstown Outlet Mall is located approximately 50 kms north of the Greater Toronto Area (GTA) directly off of Highway 400 in the town of Innisfil, Ontario. The property was built in 1995 and is approximately 161,000 square feet with the potential to expand the property to approximately 320,000 square feet. This well established outlet centre features many national retailers such as, Coach Outlet, BCBGMAXAZRIA, Tommy Hilfiger Outlet, Toys R Us Express and Rockport.
The acquisition of this property will enable the co-owners to begin to implement their outlet centre strategy immediately, as well as provide the flexibility to further develop, through expansion, the site into a full-scale Tanger Outlet Center.
RioCan and Tanger have also entered into a purchase and sale agreement to acquire approximately 50 acres of land in Kanata, Ontario, near Ottawa, to be developed as a Tanger Outlet Center. Subject to conditions, the co-owners are expected to acquire the land, which is located off of the TransCanada Highway (Highway 417) at Palladium Drive on a 50/50 basis.
The concept, design and merchandising of the Ottawa centre will be similar to those within the highly successful Tanger portfolio of outlet centres in the US. The site is located in the suburban Ottawa market of Kanata and will benefit from its access to the greater Ottawa market. When fully complete, the project will be home to approximately 350,000 square feet of branded factory outlet retailers from the U.S. and Canada offering consumers a unique opportunity to purchase merchandise directly from leading designer and brand name manufacturers at a substantial savings.
"We are very pleased to be able to jump start our co-ownership with Tanger and bring our collective expertise to a very well established, well located property and make it a key destination outlet shopping centre for Toronto and the surrounding area", said Edward Sonshine, President and CEO of RioCan. "Our site in Ottawa, represents an exciting opportunity to expand our co-ownership platform beyond Toronto, into other key Canadian retail markets."
"The acquisition of Cookstown Outlet Mall and its rebranding as the first Tanger Outlet Center north of the border accelerate our plans with RioCan for outlet center development in Canada," commented Steven Tanger, President and CEO of Tanger. "The addition of the site in the Ottawa market puts us well on the way to the establishment of a Canadian outlet shopping platform," he added.
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $11.9 billion as at September 30, 2011. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 314 retail properties, including 10 under development, containing an aggregate of over 75 million square feet. RioCan owns an interest in 38 grocery anchored and new format retail centres in the United States through various joint venture arrangements. For further information, please refer to RioCan's website at www.riocan.com.
About Tanger Factory Outlet Centers, Inc.
Tanger Factory Outlet Centers, Inc., (NYSE:SKT), is a publicly-traded REIT headquartered in Greensboro, North Carolina that operates and owns, or has ownership interests in, a portfolio of 38 upscale outlet shopping centers in 25 states coast to coast, totaling approximately 11.7 million square feet leased to over 2,400 stores that are operated by more than 415 different brand name companies. More than 175 million shoppers visit Tanger Outlet Centers annually. For more information on Tanger Outlet Centers, call 1-800-4 TANGER or visit the company's web site at www.tangeroutlet.com.
This News Release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning RioCan's and Tanger's intention to acquire the Cookstown centre and a potential expansion of that centre, the intention to develop a successful outlet center in Ottawa, the expected success of the Cookstown and Ottawa centers and the related impact on the Toronto and Ottawa markets, as well as other statements concerning each company's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements.
These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on current estimates and assumptions, which are subject to risks and uncertainties, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release. For a list of risk and uncertainties effecting the operations of RioCan, refer to the caption "Risk and Uncertainties" in RioCan's latest financial statements and management's discussion and analysis for the period ending September 30, 2011. Those risks and uncertainties include, but are not limited to, those related to: liquidity in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the investment in the United States of America ("US"), US currency and RioCan's qualification as a real estate investment trust for tax purposes. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a more robust retail environment compared to recent years; relatively stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; the availability of purchase opportunities for growth in Canada and the US; and the impact of accounting principles adopted by the Trust effective January 1, 2011 under International Financial Reporting Standards ("IFRS") which includes application to the Trust's 2010 comparative financial results. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release.
The Income Tax Act (Canada) (the "Act") contains legislation affecting the tax treatment of publicly traded trusts (the "SIFT Legislation"). The SIFT Legislation will not impose tax on a trust which qualifies under such legislation as a real estate investment trust (the "REIT Exception"). RioCan currently qualifies for the REIT Exception and intends to continue to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified.
Except as required by applicable law, RioCan under takes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For a more detailed discussion of the factors that affect Tanger's operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Such factors include, but are not limited to, the risks associated with general economic and local real estate conditions, Tanger's ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, the availability and cost of capital, Tanger's ability to lease its properties or to meet its minimum pre-leasing hurdles on proposed new developments, Tanger's inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition.
RioCan Real Estate Investment Trust
Senior Vice President & CFO
Tanger Factory Outlet Centers, Inc.
Executive Vice President and CFO