Canadian shopping centres real estate investment trust Primaris REIT is investing C$585m (€391m) in two acquisitions as part of C$724m of transactions that include two asset disposals.
The TSX-listed firm is acquiring a 50% stake in the Southgate Centre in Edmonton, Alberta and a 100% interest in the Oshawa Centre in Oshawa, Ontario in a deal to be satisfied by a combination of cash and equity.
Primaris REIT said it has also agreed to sell its Sherwood Park Mall asset in Sherwood Park, Alberta, for $107m, and completed the sale the Edinburgh Market Place asset in Guelph, Ontario for $31.5m.
Patrick Sullivan, Primaris REIT’s president and COO, said: “Southgate and Oshawa Centre are two market leading regional enclosed shopping centres with all of the property characteristics Primaris is targeting with its growth strategy. Both are located in large and growing markets, with access to mass transit and with very strong sales volumes.
“There is significant opportunity for growth at both centres, including the conversion of tenants from variable to net rent deals, leasing up vacant space and temporarily tenanted space, and optimising former department store space.”
Rags Davloor, Primaris REIT’s CFO, said: “Acquiring these high quality assets, while maintaining industry leading credit metrics, is a testament to the strategic advantages provided by Primaris’ differentiated financial model.
“Our commitment to maintain an extremely well capitalised balance sheet positions Primaris as a highly credible transaction counterparty, enabling continued growth.”
Alex Avery, CEO of Primaris REIT, said that, since 31 December 2021, Primaris has acquired $2.4bn of enclosed shopping centres from five of Canada’s 10 largest pension funds, with the “vendors taking back equity and exchangeable preferred equity investments in the REIT”.
Avery added: “The transactions announced today improve the overall quality of our enclosed shopping centre portfolio, driving the portfolio’s annual same store sales productivity from $684 per sqft as at 30 September 2024 to $736 per sqft, on a proforma basis.
“Consistent with prior acquisitions, these properties enhance the REIT’s value proposition with retailers, and offer a significant income growth opportunity consistent with the growth we see ahead for our existing assets.”
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