Canadian Tire hopes to raise $263M through REIT

Canadian Tire Corp. plans to raise $263.5 million by creating a real estate investment trust, or REIT, that will hold itsretail properties and listing itin Canada.

It issued details of an initial public offering ofCT Real Estate Investment Trust on Wednesday, saying it will offer 26.4 million shares at $10 each.

The proposed REIT would hold one distribution centre and 255 retail properties, located across Canada.

That represents 72 per cent of Canadian Tire's stores and a total of 19 million square feet of space.

The hardware and home building retailerannounced plans for a REITto unlock the value of its real estate holdings earlier this year and has received approvals from securities regulators in all provinces.

Its prospectus says the REIT would "generate reliable, durable and growing monthly cash distributions on a tax-efficient basis."

Canadian Tire says it plans to remain as the most significant tenant for the properties and its stores will sign leases with the REIT of 10 to 21 years.

The retailer said it plans to hold a majority interest in its own REIT. No date was released for the IPO, but Canadian Tire has said it wants to list this year.