New REIT in Town
Some people take supplements to become more competitive. Others, like Plaza Retail, become a REIT. (And being a REIT won't keep you out of the baseball Hall of Fame.)
The creation of Plaza Retail REIT will make the company a more aggressive developer, acquirer, and owner, says company CEO Michael Zakuta. (Above, he points out that numbers don't lie—the real estate equivalent of Shakira's hips.) Its focus in 2014 is to grow across its core markets in Atlantic Canada, Quebec and, Ontario, as well as its per-unit cashflow results. The conversion of Plazacorp Retail Properties into a REIT was formally completed Jan. 1.
The units of the REIT are now trading on the TSE (PLZ.UN: $4.30). Its portfolio includes interests in 337 properties (6.6M SF) across Canada—strip plazas, stand-alone small box retail outlets, and enclosed shopping centres (above is Plaza's propery in St. Catharines). We asked Michael about Finance Minister Jim Flaherty’s comments earlier this week about pressure in Canada to raise interest rates, and Michael replied, “We are always concerned about interest rate changes. But we have been able to finance for fixed-rate terms of 10, 15, and 20 years. This removes a lot of interest risk from our business.” Being a “value-added operator” allows the new REIT to generate better margins and permits it to use long-term debt, he adds.