Leon’s Furniture has disclosed a $1.17-billion appraised value for its Canadian real estate portfolio, providing the first formal market-based valuation of the properties it has been evaluating for a potential real estate investment trust.

The independent appraisal, included in the retailer’s second-quarter results, covers approximately 50 properties representing about 5.5 million square feet and 430 acres of land across Canada.

The appraisal suggests the properties are worth significantly more than Leon’s paid to acquire or develop them. The properties are recorded at about $284 million after accounting adjustments for factors like depreciation.

Leon’s announced in 2023 that it was exploring the creation of a publicly traded REIT that would hold selected income-producing properties, while the retailer would retain a controlling ownership position. The company has not announced a timeline for a potential listing.

The move follows a strategy used by other major Canadian retailers that have separated real estate ownership from their operating businesses. Canadian Tire launched CT REIT in 2013, creating a publicly traded vehicle focused on owning and managing properties largely occupied by Canadian Tire and other retail tenants. Loblaw also created Choice Properties REIT in 2013 to hold its real estate portfolio, before merging Choice Properties with Canadian Real Estate Investment Trust in 2018.

Leon’s said the appraisal was commissioned to establish a market-based reference for its real estate holdings, which include retail, industrial and distribution properties across the country.

The company continues to evaluate the REIT strategy, including the assets that could be transferred into a future vehicle.