One of Canada's largest retail landlords acquired in $9.4 billion deal | Daily Hive

One of Canada’s largest retail landlords acquired in $9.4 billion deal, splitting properties between two ownership groups

First Capital REIT owns the mixed-use residential and retail buildings in the core of the Vancouver Olympic Village, including the building with London Drugs. (Google Maps)

First Capital REIT, one of the largest commercial retail landlords in Canada, has agreed to be acquired in a major $9.4 billion transaction involving KingSett Capital and Choice Properties REIT — marking one of the largest real estate deals in the country this year.

The agreement will see the retail-focused real estate investment trust (REIT) split between the two buyers, with each taking on different portions of the company’s assets.

The deal, involving the three Toronto-headquartered entities, includes both cash and unit compensation for investors and is expected to close later in 2026, pending approvals.

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The transaction divides First Capital’s holdings between the two acquiring firms. Choice Properties will take ownership of approximately $5 billion worth of grocery-anchored and necessity-based shopping centres, while KingSett will acquire roughly $4.4 billion in assets, including development properties and financial holdings.

This structure allows both buyers to focus on assets that align with their respective strategies. Choice Properties, already one of Canada’s largest REITs, is positioning itself to expand its footprint in urban retail markets. KingSett, a private equity real estate firm, will assume control of the remaining portfolio and all outstanding units.

Company leadership framed the deal as a strong outcome for investors.

First Capital CEO Adam Paul highlighted the broader effort behind the agreement, noting, “This is an excellent transaction for our investors, which recognizes their longstanding support and commitment to First Capital.”

Paul Douglas, chair of First Capital’s Board of Trustees, also said, “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.”

From the buyers’ perspective, the deal is seen as both timely and strategic. KingSett CEO Rob Kumer pointed to improving conditions in the country’s real estate sector, while Choice Properties CEO Rael Diamond described the acquisition as a transformative step that strengthens the company’s position nationally.

“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,” said Diamond.

Both First Capital and Choices Properties own numerous retail properties where the major tenant is a brand of grocery and retail giant Loblaws Companies. Other major tenants with a significant presence across First Capital properties include Sobeys, Canadian Tire, TD Bank, Royal Bank, Dollarama, and GoodLife Fitness.

First Capital has about 140 properties across Ontario and Quebec and nearly 60 in British Columbia and Alberta.

Choice Properties is expected to significantly expand its retail portfolio, particularly in high-density urban areas. The newly acquired properties are projected to generate steady income and contribute to long-term growth.

The transaction still requires approval from First Capital unitholders, as well as regulatory and court approvals. A vote is expected to take place in June 2026, with closing anticipated in the second half of the year.

If completed, First Capital will be removed from the Toronto Stock Exchange and will no longer operate as a public reporting entity.

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