RioCan has a strong foundation

Article Excerpt

RioCan, along with other real estate investment trusts (REITs), faces several challenges that are beyond its control. For example, interest rates will likely rise in the next few years, making bonds more appealing to income-seekers and hurting REITs. Meanwhile, rising online competition has forced retailers that sell books, music and electronics to close stores. However, RioCan is taking steps to continue prospering. For example, it’s diversifying into office and residential properties, particularly in fast-growing cities. Moreover, many of its tenants operate steady businesses, like grocery stores and movie theatres. That attracts more shoppers to its malls and further cuts its risk. RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 303.2 million; Market cap: $8.2 billion; Price-to-sales ratio: 5.8; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) started up in 1993 and is now Canada’s largest REIT. In Canada, it owns all or part of 293 shopping centres, including 16 under development…