RioCan in no rush to build even as interest rates drop, CEO says
TORONTO — RioCan Real Estate Investment Trust chief executive Jonathan Gitlin says it will take more than just interest rates dipping lower for the company to start new major developments.
He says while lower rates help, the company has to weigh the spending equation against other options like paying down debt, buying back shares or making acquisitions.
Gitlin says the company is still seeing healthy demand and prices for its retail locations, but the condo market has turned, leaving the company with about $100 million in unsold pre-sales.
He says while the cost environment is starting to improve for construction, it will take time for existing condo inventory to get absorbed so new building projects can be justified.
In the meantime, RioCan is benefiting from a stable tenant base and all-time high jumps in rent as it replaces retail leases, thanks in part to a lack of new supply.
The robust retail demand helped drive profits up in its second quarter to $122.4 million, up from $112 million last year.
This report by The Canadian Press was first published Aug. 9, 2024.
Companies in this story: (TSX:REI.UN)
Provided Content: Content provided by Canadian Press. The Globe and Mail was not involved, and material was not reviewed prior to publication.