As of October 1, Ivanhoé Cambridge will transition the operations of its Canadian shopping centres over to JLL, the largest third-party retail property management company in North America.
“I think this alliance reinforces the degree of complexity that exists within the retail real estate sector,” said Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail. “The pandemic has accelerated many trends that were in play before 2020 such as the growth of e-commerce, the decline of department stores and the polarization of shopping malls between the haves and have nots.
“Add in the pandemic and one can see how being a retail landlord is not for the faint of heart. JLL should bring a fresh approach to managing Ivanhoé Cambridge’s portfolio for this emerging retail arena through the addition of digitally native brands, the integration of online shopping and more experiential consumption.”
Michael Kehoe, broker/owner of Fairfield Commercial Real Estate in Calgary, said the strategic alliance between Ivanhoé Cambridge and JLL is a significant development on the Canadian commercial real estate scene.
“The alliance comes at a time when the bricks and mortar retail and retail real estate in general is in a period of disruption and change. JLL, the largest third-party management group in North America, brings abundant operations and leasing muscle to the partnership and this bodes well for the Ivanhoé real estate properties and projects,” he said.
“I am certain that with fresh eyes and boots on the ground JLL will provide the innovation and horse power needed in these challenging times that will lead to positive results over time across this national portfolio.”
In a statement to Retail Insider, Ivanhoé Cambridge said it is refocusing on its core business as a real estate investor and concentrating on what it does best: buying, increasing value and selling.
“With this in mind, we want to standardize our business model for shopping centres in Canada with the one we have in place elsewhere in the world by outsourcing their operations to a strategic partner. Management outsourcing has proven successful at our international shopping centres (Brazil, Europe) as well as in other asset classes (Offices and Logistics),” it said.
“We selected JLL as a strategic partner because:
- It is the largest shopping centre manager in North America;
- Based in the United States and with a global presence, JLL has an impressive track record and expertise, as well as in-depth knowledge of market trends, which is invaluable for our retail assets;
- JLL shares the same DEI and ESG goal of carbon neutrality by 2040 and has a clear commitment to help us achieve it;
- JLL is recognized for its leadership as well as its vision for innovation and performance in the current retail environment;
- JLL has committed to expanding its presence in Canada and Quebec by committing to keeping jobs in Canada, using Canadian suppliers for the properties and investing in the communities.
The company said that in selecting its partner it remained mindful of making a positive impact in Quebec across all of its activities and contributing to Quebec’s economic recovery and vitality.
“The announcement of this new strategic alliance, combined with our ongoing asset disposals and investments in promising sectors, is enabling us to rebalance our portfolio for greater resilience. With a partner such as JLL at our side, we will be able to optimize asset performance, continue to drive innovation and ESG performance,” it said.
As of June 30, Ivanhoé Cambridge had: 41 shopping centres for 27 million square feet including: 21 in Canada (five) in Quebec; 17 in Brazil; one in Germany; one in China; and one in the US.
Ivanhoé Cambridge holds interests in more than 1,100 buildings, primarily in the industrial and logistics, office, residential and retail sectors. Ivanhoé Cambridge held C$60.4 billion in real estate assets as at December 31, 2020, and is a real estate subsidiary of the Caisse de dépôt et placement du Québec, a global investment group.
“Through this alliance, we are expanding our presence in Quebec, a strategic market for the growth of JLL given the dynamism of its real estate sector and of its various industries contributing to the Canadian economy. We also look forward to collaborating with Ivanhoé Cambridge to shape growth opportunities, transform through technology and build strong communities in Canada through the COES,” said Alan MacKenzie, CEO, JLL Canada.
“I’m most importantly looking forward to tapping into the Ivanhoé Cambridge retail team’s deep knowledge of the local retail market to combine efforts and increase the value of the Ivanhoé Cambridge properties, benefitting retailers, their customers and our environment.”
In a news release, the companies said the vast majority of Ivanhoé Cambridge’s property team of retail employees are expected to join JLL Canada, whose management team and key decision-making roles will be headquartered in Montreal. JLL also plans to open an office in Québec City in the coming months.
“We are excited to bring a globally renowned company to deepen its footprint and investments in Quebec. To focus on our core business as a seasoned, clear-sighted real estate investor and to align and standardise our business model globally, we wanted to find a partner with the scale, track record and expertise to continue the optimization of our assets’ performance and lead the industry in defining the future of the retail sector, thus creating long-term value for our depositors,” said Nathalie Palladitcheff, President and CEO, Ivanhoé Cambridge, in a statement. “JLL’s global reputation and like-minded culture will continue to support us, while creating career opportunities for our retail teams joining the JLL family.”
“Retail has been going through a transition period over the last decade plus, where the focus has become on creating sustainable and dynamic experiential settings that engage and excite the communities it serves – and the pandemic has acted as a major accelerant on those trends,” said Greg Maloney, CEO, JLL Americas Retail. “Retail is our division’s sole focus and we are thrilled to expand our expertise and footprint in Canada, and Quebec, establishing JLL as the largest third-party retail manager in Canada as well.”
JLL said it will also collaborate with Ivanhoé Cambridge to develop a Centre of Excellence for Sustainability (COES) in Quebec, and an accompanying team, to accelerate the transition to sustainable and inclusive real estate through the development and implementation of current and near-future technologies.
JLL is a Fortune 500 company with annual revenue of $16.6 billion in 2020, operations in over 80 countries and a global workforce of more than 92,000 as of June 30, 2021.