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RioCan cuts payouts as COVID-19 challenges outlook for retail real estate – BayToday

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TORONTO — RioCan Real Estate Investment Trust says it is cutting its payouts to unitholders by a third as the COVID-19 pandemic creates an uncertain future for shopping centres. 

RioCan, which counts Dollarama, Canadian Tire and Costco among its tenants, says that it is slashing its monthly payout to eight cents per unit, down from 12 cents.

The company says the cut will save about $152 million per year, which the company will use for expanding investments in residential real estate, as well as paying down debt and buybacks. 

RioCan says the ongoing uncertainty from the pandemic influenced the board’s decision to make the cut, which starts with the February payout for January 2021.

The decision comes after RioCan’s third quarter report said it had collected about 93 per cent of rent billed during the quarter, but that 22 per cent of its tenants were potentially vulnerable to the pandemic, such as movie theatres, gyms and sit-down restaurants.

Chief executive Edward Sonshine says RioCan still has a well-positioned portfolio and solid tenants, and the new baseline for payouts will help the REIT’s transformation, as it plans to move out of malls that house hard-hit fashion retailers.

“As RioCan continues to navigate through the uncertain retail landscape created by the COVID-19 pandemic and faces an unknown length and breadth of closures, the board has taken the prudent action of reducing our distribution,” Sonshine said in a statement. 

“A more conservative payout ratio is important in this undeniably challenging environment.”

This report by The Canadian Press was first published Dec. 3, 2020.

Companies in this story: (TSX: REI.UN)

The Canadian Press

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Why residential real estate investors need to go big in 2021 – Wealth Professional

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While many Canadians have been seeking larger homes outside of urban centres, demand for properties in Canada’s largest urban centres have remained high.

Ottawa’s aggregate price increased 14.9% year-over-year to $568,608 during the fourth quarter, the greater regions of Montreal, Toronto and Vancouver increased 12.4%, 10.4% and 7.2% to $487,380, $936,510 and $1,155,346, respectively.

“Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd, referring to the Greater Toronto Area market.  “2020 did bring some balance to the region’s condominium market but larger units, often in the greater region, are still in high competition.”

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Introducing Personal Real Estate Corporations – Tax – Canada – Mondaq News Alerts

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To print this article, all you need is to be registered or login on Mondaq.com.

Effective October 1, 2020, brokers and agents in Ontario can
incorporate personal real estate corporations (PRECs) to receive
remuneration for their services to their brokerage. The following
is a summary of PRECs and the relevant considerations that may
apply.

Why would I want a PREC?

The primary benefit of a PREC is the ability to defer income
tax. Without a PREC, agents and brokers pay tax at their personal
rate on the commissions they earn, which can be as high as 53.5% at
the top marginal rate. If paid to the PREC instead, the commission
will be taxed at the corporate rate of 12.2% on the first $500,000,
assuming the PREC is eligible for the small business rate. This
leaves you with more money to invest within the corporation. While
money you later take out of the PREC will be subject to personal
income tax, your accountant may be able to advise on additional
savings strategies, such as the payment of a salary or
dividends.

How do I know if a PREC is right for me?

If you would have funds to reinvest after paying your living
expenses and taxes, a PREC may be worth considering. You should
speak to an accountant and corporate lawyer to assess whether a
PREC makes sense for you.

What are the requirements of PRECs?

PRECs require the agent or broker to be employed (either as an
employee or independent contractor) by a brokerage, and to be the
only voting shareholder, the sole director, and the president of
the corporation. Non-voting shares may be held by other family
members. There must also be a written agreement in place to govern
the relationship between the agent, the brokerage, and the PREC,
among other requirements.

Are there any restrictions on PRECs that do not apply to
regular corporations?

There are several. The PREC may not carry on business as a
brokerage, nor can it carry on the business of trading in real
estate (other than to provide the services of the agent or broker
to the brokerage). This will restrict the use of the PREC to buy
and sell real estate. The PREC may only receive remuneration that
is associated with trading in real estate from the brokerage, and
the agent or broker can only receive such remuneration from the
PREC or brokerage. Furthermore, the PREC’s name and any
advertisements must not suggest it trades in real estate.

Can my existing corporation operate as a PREC?

Yes. However, this would involve amending the existing
corporation to turn it into a PREC. Alternatively, to achieve
greater flexibility you may wish to incorporate a second
corporation to operate as the PREC instead. Please speak to your
legal advisor for more information.

Does the PREC provide protection from personal liability?

It does not. While the PREC may receive commissions earned by
the agent or broker, it is not a vehicle through which he or she
provides services.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Fitch Rates Xinyuan Real Estate's Proposed USD Senior Notes 'B-' – Fitch Ratings

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Fitch Rates Xinyuan Real Estate’s Proposed USD Senior Notes ‘B-‘  Fitch Ratings



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