Beachwood, Ohio-based Developers Diversified Realty Corp. has entered a joint venture to develop a project in Toronto, fueling speculation that the REIT may be planning a larger push into Canada.

Its first foray into the country will be a C$150 million 700,000-square-foot mixed-use center, undertaken in a 50/50 partnership with Toronto-based Rice Commercial Group. The partners plan to break ground in 2009 and open the center in 2011.

But there's talk that Developers Divers-ified's aspirations go well beyond building one property. Developers Diversified isn't saying whether it has grander intentions. Instead, it issued a statement about the joint venture and published an 11-page overview of the Canadian market.

One of the more intriguing rumors making the rounds is that Developers Diversified may be positioning itself to buy Canada's largest REIT, RioCan. Jeff Roberts, an analyst with Montreal-based Desjardins Securities, floated that idea in a recent research note. Roberts's suspicion arose after RioCan's CFO Robert Wolf and vice president of investments Katherine Ritcey resigned the day after Developers Diversified announced its foray into Canada. But other market observers think the news was mere coincidence and point to the fact that if a sale was pending, the execs would likely have stayed onboard to receive a payout upon commencement of a deal. “This is just not something they are contemplating…we're very confident in our sources on this one,” says Barry Vinocur, editor of Realty Stock Review.