First Capital REIT announced it has entered into an agreement to be acquired by KingSett Capital and Choice Properties REIT in a transaction valued at approximately $9.4 billion, including assumed debt.
Under the terms of the deal, First Capital unitholders will receive a combination of cash and units, totaling $24.40 per unit. This represents a 17 percent premium to the REIT’s 20-day volume-weighted average price and an 8 percent premium to its net asset value. The consideration mix is approximately 79% cash and 21% equity in Choice Properties.
The transaction will split First Capital’s assets between the two acquirers. Choice Properties will acquire approximately $5.0 billion in necessity-based retail and neighborhood shopping center assets, strengthening its national retail portfolio and expanding its presence in urban markets. KingSett will acquire approximately $4.4 billion of assets along with all outstanding First Capital units.
The deal is expected to provide immediate liquidity to unitholders while also offering continued upside through ownership in Choice Properties. It also enhances scale and diversification across the combined portfolio, positioning Choice Properties for long-term growth and improved capital markets positioning.
Choice Properties plans to finance its portion of the acquisition through a mix of debt and equity, including issuing new units, a $0.6 billion equity investment from George Weston Limited, and the assumption of existing debt. The REIT expects to maintain a disciplined capital structure with a path to deleveraging over time.
KingSett has secured fully committed financing for its portion of the transaction, supported by debt financing from TD Securities and Desjardins. The transaction is not subject to financing conditions.
The deal will be implemented through a statutory plan of arrangement and is subject to unitholder approval, court approval and customary regulatory conditions. First Capital expects to hold a unitholder vote in June 2026, with closing anticipated in the second half of the year. Following completion, First Capital units are expected to be delisted from the TSX.
The transaction received unanimous approval from First Capital’s Board of Trustees, supported by fairness opinions from RBC Capital Markets and National Bank Capital Markets.
KEY QUOTES:
“We are pleased to deliver immediate value to our investors through this Transaction. Supported by the recommendation of a Special Committee comprised of independent trustees, the First Capital Board believes this Transaction is in the best interests of First Capital unitholders. Accordingly, the Board recommends that unitholders vote in favour of the Transaction.”
Paul Douglas, Chair, Board of Trustees, First Capital REIT
“This is an excellent transaction for our investors, which recognizes their longstanding support and commitment to First Capital. I am deeply grateful to our employees – many of whom will continue to support the assets acquired by KingSett and Choice – as well as to my partners on the executive leadership team, who have remained singularly focused on what was in the best interests of First Capital unitholders, and whose diligence and work ethic were critical in bringing us to this point.”
Adam Paul, President and Chief Executive Officer, First Capital REIT
“This Transaction comes at a time when we are seeing renewed optimism and positive momentum in Canadian real estate. We have partnered with Choice Properties to align the right assets with our respective strategies to deliver maximum value to First Capital’s unitholders. We look forward to working with First Capital’s tenants, partners and other stakeholders in the years ahead.”
Rob Kumer, Chief Executive Officer, KingSett Capital
“This is an exciting and transformative transaction that will solidify Choice Properties as Canada’s leading REIT. Choice Properties is acquiring best-in-class, necessity-based neighbourhood shopping centres that will significantly strengthen our portfolio. We believe this is a unique and compelling opportunity that will increase our presence in urban markets and further diversify our tenant base. Importantly, we expect the combination of these assets with our existing portfolio will deliver enhanced long-term growth and value for our unitholders.”
Rael Diamond, President and Chief Executive Officer, Choice Properties REIT
