New York -- Canada’s Loblaw Cos. Ltd. plans to spin off the vast majority of its property assets into a real estate investment trust. The retailer said it plans to spin off real estate worth more than C$7 billion ($7.05 billion) into the REIT and sell units of the trust through an initial public offering that it hopes to complete by mid-2013.
"We are announcing this today because we feel the timing is right for both our business and the capital markets," said Galen Weston, Loblaw's executive chairman, on a conference call, according to Bloomberg. "The size and quality of our real estate assets should be appealing to investors."
Loblaw said its real estate portfolio spans an estimated 47 million sq. ft., according to the report. As part of the transaction, Loblaw plans to contribute about 35 million sq. ft. to the REIT, and it will enter into long-term lease arrangements with the REIT on those properties.
Loblaw said it intends to retain a significant majority interest of over 80% in the REIT.