Primaris Real Estate Investment Trust announced late Monday that it has agreed to acquire a 100% interest in Promenades St-Bruno in Montreal, Quebec from Cadillac Fairview for $565 million, to be satisfied by a combination of cash and equity, subject to certain conditions. The acquisition further builds Primaris’ track record of successfully acquiring market leading shopping centres in growing Canadian markets, said the company in a news release.
“Promenades St-Bruno has all the characteristics which Primaris targets in acquisitions: over $271 million in annual sales, $917 in sales per square foot, and 154 acres of land in Canada’s second largest and growing market of Montreal, adjacent to mass transit,” said Patrick Sullivan, President and Chief Operating Officer. “There is significant NOI growth potential including leasing up vacant and temporarily tenanted space, and optimizing former department store space.”
Primaris is Canada’s only enclosed shopping centre focused REIT, with ownership interests in leading enclosed shopping centres located in growing Canadian markets. The proforma portfolio totals 15.6 million square feet, valued at approximately $5.4 billion at Primaris’ share.
According to Primaris, these are Promenades St-Bruno Highlights:
- Leading regional enclosed shopping centre in Canada’s second largest population centre, Montreal, Quebec;
- Located in Montreal’s affluent south shore, just 25 minutes from downtown Montreal and easily accessible via the Jacques Cartier and Victoria bridges converging to Highway 116;
- Adjacent to Saint Bruno Exo train station, a catalyst for higher-density mixed-use development;
- 1,096,200 square foot mall located on 154 acres of land, for an approximate 11% site coverage;
- $917 per square foot same store sales productivity and total annual CRU sales volume of $271 million;
- 74.8% long-term in-place occupancy, 81.4% in-place occupancy, 83.3% committed occupancy (excluding the vacant HBC space in-place occupancy is 92.4%);
- Weighted average lease term of 4 years;
- Approximately $227 million in capital upgrades and redevelopment projects completed since 2015 including investments into common areas, repurposing of the former Sears box, and the completion of a two-level flagship Simons store;
- BOMA BEST Gold Certified;
- Large format tenants include Simons, Winners, Sports Experts, Marks; and
- Notable CRU tenants include Aritzia, Sephora, Lululemon, Nespresso, Uniqlo, and JD Sports.
Rags Davloor, Chief Financial Officer, said: “High quality acquisitions combined with industry leading credit metrics demonstrate the strategic advantages of Primaris’ differentiated financial model. Our commitment to our extremely well capitalized balance sheet is key to Primaris’ profile as a highly credible transaction counterparty.”
Similar to the Trust’s existing portfolio, the Acquisition offers NOI growth potential over the next few years, as operating and financial performance normalizes, and as Primaris’ full-service management platform integrates and operates the property, said the REIT.
Opportunities to increase NOI include:
- Redemise and lease approximately 130,600 square feet of former anchor space to strong covenant, high-quality national retailers;
- Lease approximately 73,000 square feet of temporarily tenanted or vacant CRU space to strong tenants at market rents; and
- Leverage Primaris’ platform to deploy its cost management strategy.
“Primaris’ high quality acquisitions exceed $1.5 billion in 2025 and $3.3 billion since 2021. All of these acquisitions offer strong NOI growth potential and significant excess land,” said Alex Avery, Chief Executive Officer. “We have materially expanded, and enhanced the overall quality of our enclosed shopping centre portfolio since 2021, driving the portfolio’s proforma annual same store sales productivity to $791 per square foot. The concurrent equity offering increases Primaris’ public float and enhances the trading liquidity of Primaris’ units, to the benefit of all unitholders.”
In June, Toronto-based Primaris announced the acquisition of CF Lime Ridge Mall in Hamilton, Ontario, from an entity managed by Cadillac Fairview, the real estate arm of the Ontario Teachers’ Pension Plan. The $416 million deal was comprised of a combination of cash and equity.
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