First Capital’s $9B portfolio to be divided between Choice Properties and KingSett

Pedestrians cross Bay St. in the financial district in Toronto, Friday, Sept. 8, 2023. THE CANADIAN PRESS/Andrew Lahodynskyj

Choice Properties REIT and KingSett Capital have signed a deal worth more than $9 billion to buy First Capital REIT and split up the trust’s shopping centre-focused real estate portfolio.

The cash-and-unit deal, valued at about $9.4 billion including debt, will see the two firms divvy up retail-focused spaces across 136 neighbourhoods in British Columbia, Alberta, Ontario and Quebec, including Vancouver’s False Creek Village and Toronto’s Liberty Village.

The deal will see Choice Properties REIT, already one of Canada’s largest real estate trusts as the property division of George Weston Ltd., add dozens more grocery store locations to its existing Loblaw and other retail locations.

The terms see Choice acquiring $5 billion of First Capital’s portfolio, focused on neighbourhood shopping centres.

Meanwhile, KingSett, a private equity real estate firm whose properties include Scotia Plaza in Toronto, will take on about $4.4 billion of the trust’s assets including its high-street retail properties.

“This is an excellent transaction for our investors,” First Capital CEO Adam Paul said in a news release.

Rob Kumer, head of KingSett, said the deal comes as there are signs of renewed optimism in Canadian real estate.

Choice Properties was launched in 2013 when Loblaw Cos. Ltd. spun out its property holdings in an initial public offering. The trust now has more than 68 million square feet of real estate with an estimated value of about $17.8 billion.

Choice Properties CEO Rael Diamond said the deal will increase its presence in urban markets and further diversify its tenant base.

“Opportunities to acquire assets of this quality and scale are extremely rare, especially when they are so closely aligned with our strategy,” he told a conference call with investors and financial analysts.

He said the portfolio includes 50 grocery store tenants that are competitors to Loblaw Cos. Ltd., as well as 65 Loblaw and Shoppers Drug Mart locations.

Asked if the Competition Bureau is likely to have any concerns about the deal, Choice Properties general counsel Simone Cole said she believes they’ve covered their bases.

“Obviously there’ll be a review, but we feel really confident in the work we’ve done for that.”

Under the plan, First Capital unitholders will receive $19.24 in cash and 0.3186 units of Choice Properties per First Capital unit.

The offer is valued at $24.40 per First Capital unit, based on the closing unit price of Choice Properties on Wednesday.

First Capital units were up $1.81 or eight per cent at $23.65 in Thursday afternoon trading on the Toronto Stock Exchange.

This report by The Canadian Press was first published April 16, 2026.

By Ian Bickis