VICI Properties Inc. is continuing their expansion into Canada with the announcement today that they’ve entered into a sale-leaseback arrangement with Century Casinos for four Alberta properties.
VICI is acquiring the real estate assets of Century Casino & Hotel Edmonton, Century Casino St. Albert, Century Mile Racetrack and Casino in Edmonton, and Century Downs Racetrack and Casino in Calgary for an aggregate purchase price of $221.7 million CAD in cash. The Century Canadian portfolio will be added to the existing triple-net Century master lease; annual rent will increase by $17.3 million CAD and has been extended to a full 15-year initial base term, with four five-year renewal options.
“This transaction unlocks the real estate value of our Canadian properties, while continuing our Canadian operations, and provides us with greater financial flexibility as we continue to grow,” Erwin Haitzmann and Peter Hoetzinger, co-chief executive officers of Century Casinos, said in a statement. “We intend to use the sale proceeds to fund improvements at the Nugget [Casino Resort in Nevada] and for general corporate purposes. We are also looking at the potential to apply some proceeds to pay down debt under our credit agreement and/or to return funds to shareholders through stock repurchases and/or a special dividend. We continue to evaluate the optimal use of our capital.”
The deal is similar to the one announced by VICI in January where they acquired the real estate assets of the four PURE casino properties based in Alberta for an aggregate purchase price of approximately $271.9 million CAD. That deal was VICI’s first international investment and had the same structure: VICI entered into a master-lease agreement with PURE covering their portfolio as well.
“While small, we think the deal fits nicely into VICI’s strategy of expanding further internationally with this second deal in Canada, while also deepening its relationship with a growing operator in Century,” said Barry Jonas, an analyst with Truist Securities. “The deal should be modestly accretive to VICI’s AFFO [Adjusted Funds from Operations],”
Century Casinos earlier this month released their Q1 results, reporting that the Canadian properties generated just over $16.5 million in net operating revenue, with earnings of just over $4 million.
The four properties from today’s deal combined feature 79,000 square feet of gaming floor with 2,450 slots, 80 VLTs, and 33 table games.
VICI Properties Inc. owns one of the largest portfolios of gaming, hospitality, and entertainment destinations across North America, including Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas. The company was trading for $31.48 USD on the NYSE today at 14:10 p.m. EST, up .39.