RioCan REIT (REI-UN-T) has continued its trend of bringing in partners on major developments, selling 50 per cent interests in two of its residential-based projects to Maplelands Development Inc. (Dufferin Plaza in Toronto) and Killam Apartment REIT (Luma at Elmvale Acres in Ottawa).

The transactions total about $32.6 million, with Dufferin Plaza comprising $28.8 million of the total and Luma $3.8 million.

“These two transactions are a continuation of RioCan’s strategy to monetize the value that is inherent in our development pipeline as well as to reduce the amount of capital required to build out our urban mixed-use developments that are an important part of RioCan’s evolution,” said Edward Sonshine, chief executive officer of RioCan, in a release Tuesday.

Maplelands is a new development partner for RioCan. The company is newly established in Canada, and is a subsidiary of ASGC Construction of the United Arab Emirates.

Over the last three decades, ASGC has delivered projects in the residential, commercial, retail, industrial and hospitality sectors. Maplelands chose the Dufferin Plaza project as its first entry into the Canadian market due to “its superior quality and attractive attributes, combined with RioCan’s development expertise,” the release states.

Dufferin Plaza in Toronto

Dufferin Plaza is an open-air centre on four acres at Dufferin Street and Apex Road, near the Lawrence West subway station, Yorkdale Shopping Centre, Allen Expressway and Highway 401.

RioCan and Maplelands will redevelop a mixed-use property with approximately 608 units, or a 417,000-square-foot condominium tower and 32,000 square feet of retail space. The project has received Official Plan approval.

RioCan will be the development and retail property manager, and will develop the site in conjunction with its recently acquired 50 per cent interest at adjacent 3180 Dufferin St.

3180 Dufferin is the third project RioCan is developing in partnership with Woodbourne Capital Management. This project is a mixed-use development with up to 440,000 square feet of gross floor area intended as residential rental and ground-floor commercial.

The two projects will result in a mixed-use development of nearly one million square feet.

The Dufferin Plaza transaction closed on Aug. 10. It represents approximately $115 per square foot of future density, of which $11.3 million will be paid as pre-construction development phases are achieved over the next 18 to 24 months.

A cap rate of 2.62 per cent is based on in-place net operating income, but is more relevant to the density created by RioCan through the zoning process commenced several years ago.

This is $11.6 million above carrying value, of which approximately $10.5 million will be recognized as inventory gains in Q3 2020.