Tuesday, August 19, 2008

Canadian Tire Agrees to CAN $174 Million Sale Leaseback of 12 Stores Across Canada

The Chronicle Herald - August 19, 2008

Hard goods retailer Canadian Tire Corp. says it has struck a deal to sell and lease back 12 of its store properties for $174 million. Canadian Tire said late Monday the company will book a pre-tax gain on the sale of about $70 million. The transaction is subject to Competition Act approval and is expected to close in September.

The properties are located across Canada and include recently built or expanded Canadian Tire stores. Six of the properties also have a Mark’s Work Wearhouse outlet, the retailer’s clothing division.

Canadian Tire owns about 74 per cent of its store network and leases the rest of its other retail properties. The properties sold Monday represent about four per cent of Canadian Tire’s total real estate portfolio.

"While we continue to see real value in owning the majority of our real estate assets, carefully selected sale-leasebacks enable us to monetize the value of select properties creating financial flexibility while maintaining our overall operating flexibility." said Tom Gauld, president and CEO of the company.

"The properties included in this transaction are locations featuring stores that are either new or recently expanded so we do not see a need to relocate these stores in the foreseeable future. "This enables us to monetize these sites at attractive rates while creating financial flexibility."

Canadian Tire did not identify the buyer or buyers of the retail properties. Earlier this summer, however, the company sold an Ottawa store property for $40 million to RioCan Real Estate Investment Trust, Canada’s largest shopping mall owner, in a sale-leaseback deal.

In its release late Monday, Canadian Tire said it will continue to selectively look at cashing in on its extensive real estate assets, including two urban Canadian Tire stores and an Eastern Canada warehouse announced earlier this year.

Canadian Tire operates 1,170 general merchandise and apparel retail stores and gasoline stations across Canada. The company, with 57,000 employees, sells auto parts, sports and lesure equipment and home products. Sphere: Related Content

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