RioCan REIT has paused new construction projects due to high interest rates and borrowing costs.
“As cost and financing conditions persist, RioCan does not intend on commencing any material new physical construction in the near term,” the REIT said in its third quarter report.
Toronto-based RioCan will continue with 1.7 million square feet of projects under construction but is holding off on starting shovel-ready projects while taking a wait-and-see approach with market conditions.
“We’ve made a decision that, in the short term, starting construction isn’t the most effective use of our shareholders’ money,” Jonathan Gitlan, RioCan’s CEO, told The Canadian Press.
With construction financing subject to high interest rates and variable debt, he said, it makes sense to reduce RioCan’s debt of $7.3 billion. RioCan plans to keep advancing projects through the early development and permitting stages.
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.