RioCan REIT (REI.UN.T) and Tanger Factory Outlet Centers Inc. (SKT) plan to form a joint venture to create outlet shopping centers in Canada similar in concept and design to those in Tanger's U.S. portfolio.

The real estate investment trusts said any Canadian projects developed will be owned on a 50/50 basis and will be branded as Tanger Outlet Centers.

Tanger will provide leasing and marketing services to the venture, while RioCan will provide development and property management services.

The joint venture aims to develop as many as 10 to 15 outlet centers in larger urban markets and tourist areas across Canada over the next five to seven years.

They said the typical size of a Tanger outlet center is about 350,000 square feet, but varies due to tenant demand. Based on similar parameters, the overall investment of the joint venture could be as high as C$1 billion.

Earlier this month, U.S. retailer Target Corp. (TGT) said it expects to spend about C$1 billion renovating retail sites currently operated by Zellers, a discount chain owned by Hudson's Bay Co. Target is paying C$1.825 billion for the leasehold interests in up to 220 sites operates by Zellers.

In the U.S., Greensboro, N.C.-based Tanger owns or has a stake in a portfolio of 33 outlet shopping centers. More than 375 brand-name companies lease space in its outlets.

RioCan, Canada's biggest REIT, has stakes in a portfolio of 296 retail properties, including 10 under development.

-By Carolyn King, Dow Jones Newswires; 416-306-2100; carolyn.m.king@dowjones.com