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RBC Canadian Core Real Estate Fund Increases Portfolio

RBC Global Asset Management (RBC GAM), the asset management division of Royal Bank of Canada (RY), announced Wednesday that RBC Canadian Core Real Estate Fund has entered into an agreement to acquire a 50% stake in a portfolio of real estate assets from its partner, British Columbia Investment Management Corporation (BCI), and its real estate division, QuadReal Property Group.

Assets are valued at more than C$1 billion. This acquisition, one of the largest real estate transactions in Canada this year, brings the value of the assets of the partnership between RBC GAM Inc. and BCI to more than C$9 billion. (See Royal Bank of Canada stock charts on TipRanks)

The acquired portfolio consists of 12 buildings located in Toronto, Vancouver, and Edmonton; 70% are industrial buildings and 25% are multi-family residential buildings. The fund’s assets thus increases by approximately 5.5 million square feet of industrial space, and some 843 rental units. The transaction was completed off-market. Under the terms of the partnership, BCI will own the remaining interest in each of the properties and QuadReal will continue to operate and manage the properties, ensuring their long-term value is maintained.

Michael Kitt, Head, Private Markets and Real Estate Equity Investments, RBC Global Asset Management Inc., said, “The acquisition of these new assets is another significant milestone for the RBC Canadian Core Real Estate Fund, and demonstrates the value and alignment of our partnership with BCI and QuadReal.

“We believe that an allocation to real assets remains a fundamental component of a well-diversified investment portfolio, and our Fund was created to meet this need by providing Canadian investors and advisors with access to an exceptional portfolio of commercial real estate assets, backed by three industry leaders.”

On September 1, Credit Suisse analyst Mike Rizvanovic kept a Buy rating on RY with a C$144 price target. This implies 10.8% upside potential.

The rest of the Street is bullish on RY, with a Strong Buy consensus rating based, on seven Buys and two Holds. The average Royal Bank of Canada price target of C$145.23 implies 11.4% upside potential to current levels.

TipRanks’ Smart Score

RY scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.

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