Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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M A R C H 2 0 1 6 / S C T 7 HOT MARKETS Lowe's takes Canada with Rona deal Mooresville, N.C.–based Lowe's is set to acquire Ca- nadian home-improvement chain Rona for about $2.3 billion. The deal, according to Lowe's Chairman, Presi- dent and CEO Robert A. Ni- block, speaking in a press re- lease, "leverages the strengths of two great companies, positioning us for continued success in Canada's over- C$45 billion [$32 billion] and growing home-improve- ment industry. The strategic rationale of this transaction, for both companies, is very compelling." Niblock says Lowe's stands to benefit from Rona's "excellent store lo- cations" across Canada. In particular, the deal will get Lowe's into Québec. There, he said, "Rona is the mar- ket leader, and we have no presence. We have commit- ted to maintaining Rona's operations in Boucherville, where we will headquarter our Canadian businesses and plan to continue to op- erate Rona's multiple retail banners and distribution services to independent dealers." Leading the Canadian operations will be Sylvain Prud'homme, president of Lowe's Canada. The com- bined companies will be tied with The Home Depot as Canada's biggest home- improvement chain, with some $5.6 billion in annual revenue. Rona currently has 236 owned and 260 franchised stores. Lowe's has 42 stores in Canada, with plans to increase that to 70 within three years. Lowe's says it has identi- fied some C$1 billion worth of opportunities to increase revenue and operating prof- itability in Canada. These include serving a new por- tion of the market through Lowe's expertise in certain product categories — notably appliances — and by means of Lowe's strengths in omni- channel retail. Brookfield makes a play for Rouse Properties Toronto-based Brookfield Asset Management made an unsolicited bid to buy REIT Rouse Properties for about $657 million. The offer represents a premium of 26 percent to the closing price of Rouse shares on Jan. 15, as well as a 19 percent premium on the stock's 30-day, volume-weighted average trading price. "Our of- fer provides an attractive opportunity for Rouse shareholders to realize a significant premium to recent public market pricing," said Brian Kings- ton, CEO of Brookfield Property Group, the real estate arm of Brookfield Asset Management, in a prepared statement. Brookfield presented its bid to the Rouse board on Jan. 16. The board says it has set up a committee to review the offer and other alternatives for maximiz- ing shareholder value. Brookfield, which has $225 billion in as- sets under management worldwide, already owns about one-third of Rouse. The latter comprises a 24 million-square-foot portfo- lio of 35 properties spun off from General Growth Properties in 2012. For global commercial property investors, the U.S. is the most appealing market in which to operate. About 46 percent of respondents to the Association of Foreign Investors in Real Estate's annual survey named the U.S. as the country provid- ing the best opportunity for capital appreciation. Below are the top 5 markets for 2016. 1. U.S. 2. BRAZIL 3. SPAIN 4. IRELAND 5. U.K.

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