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Choice Properties REIT and KingSett Capital have announced a joint acquisition of First Capital REIT in a cash-and-stock transaction valued at approximately USD 6.85 billion, including debt. The deal involves splitting First Capital's portfolio, with Choice acquiring grocery-anchored retail assets and KingSett taking over the remaining properties as a private investment. The transaction offers shareholders a mix of cash and stock at a premium to the previous closing price. The move reflects continued investor interest in stable, necessity-driven retail assets across Canada's urban markets.
Choice Properties REIT and KingSett Capital have entered into an agreement to acquire First Capital REIT in a cash-and-stock deal valued at approximately USD 6.85 billion, including debt, according to an announcement made in the past week. Advertisement
Under the proposed structure, First Capital's portfolio will be divided between the two buyers. Choice Properties will acquire grocery-anchored retail assets valued at around CAD 5 billion, while KingSett Capital will take over the remaining portfolio as a private investment estimated at approximately CAD 4.4 billion. This structure allows both entities to align the assets with their respective investment strategies.
First Capital's stock reacted positively to the development, rising by more than 8 percent during morning trading following the announcement. Shares of Choice Properties also recorded a modest increase of around 1 percent, reflecting investor confidence in the transaction.
The portfolio includes open-air, grocery-anchored shopping centres located across neighbourhoods in Canada. Such retail formats have continued to attract institutional interest due to their relatively stable rental income and resilience during economic fluctuations, particularly as they cater to daily consumer needs.
During an investor call, Choice Properties CEO Rael Lee Diamond stated that the portfolio being acquired offers stronger exposure to major urban markets, higher population density within a five-kilometre radius, and a greater share of necessity-based tenants. He also indicated that the portfolio has relatively lower development exposure compared to First Capital's broader holdings.
Based on calculations, each First Capital shareholder is expected to receive CAD 19.24 per share in cash along with approximately CAD 5.16 per share in Choice Properties stock. This values First Capital at around CAD 5.18 billion and represents a premium of about 11.7 percent compared to its previous closing price in the past week.
The transaction is expected to be completed in the second half of 2026, subject to regulatory approvals and customary closing conditions. Similar consolidation trends have been observed in developed real estate markets, where large institutional players are focusing on income-generating retail assets with strong fundamentals.
Source Reuters
5th Jun, 2025
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