RioCan has sold or conditionally agreed to sell $1.26 billion of RioCan Living assets and expects to surpass its $1.3-billion capital-repatriation target as it concentrates its business on retail properties.

The real estate investment trust has effectively reached the target it established for 2025 and 2026, president and CEO Jonathan Gitlin said during RioCan’s second-quarter conference call.

“It’s about simplifying the business, enhancing financial flexibility and directing capital to opportunities where it can create the greatest long-term value for our unitholders,” Gitlin said.

RioCan completed the sale of its interests in FourFifty The Well in downtown Toronto and the first two phases of Bellevue in Montreal during the second quarter, generating combined gross proceeds of $234 million.

Those transactions, along with the earlier sale of The Underwood Apartments in Calgary, brought first-half proceeds from RioCan Living property dispositions to $280.5 million.

After quarter-end, RioCan entered conditional agreements to sell interests in two additional residential properties for estimated gross proceeds of $205.7 million, according to its financial results.

Management confirmed that three multifamily properties will remain after the conditional transactions close and said their combined value is considerably more than $50 million.

RioCan expects the properties to attract buyers despite weakness in the broader multifamily investment market because they are relatively new and are not subject to rent controls.

The trust also has approximately $86 million of unsold condominium inventory, representing about one per cent of its net asset value. Management said it is considering both individual unit sales and transactions with bulk purchasers.

No specific projects have been tied directly to the residential-sale proceeds. Instead, management is weighing debt reduction, retail-property investments, unit repurchases and potential acquisitions based on their relative returns.

Debt reduction has included the repayment of a $500-million unsecured debenture, $91 million of mortgages and approximately $14 million of condominium construction loans during the second quarter.

Another $100 million is expected to be invested in RioCan’s retail portfolio this year, Gitlin said. The trust deployed $44 million during the first half, and plans to divide the full-year investment roughly equally between property enhancements and retail intensification. Projects include a Metro expansion and LCBO relocation at Yonge Eglinton Centre, as well as a new Costco at RioCan Centre Burloak.

Gitlin said acquisitions are becoming a more attractive option as RioCan’s cost of capital declines and high-quality retail properties become available. The trust could acquire properties independently or through joint ventures.

Unit repurchases remain another option, although management said they have become less compelling as RioCan’s unit price has increased.

The residential sales come as the trust’s core retail portfolio continues to record strong demand. Retail committed occupancy reached a RioCan record of 98.8 per cent during the second quarter.