Primaris Real Estate Investment Trust is raising approximately $200 million in new equity as it evaluates another major round of shopping centre acquisitions, with the REIT disclosing that it is in various stages of negotiations involving more than $1 billion in potential purchases.
The Toronto-based REIT announced September 14 that a syndicate of underwriters led by TD Securities, Desjardins Capital Markets and RBC Capital Markets will purchase 9.91 million Primaris units on a bought-deal basis at $20.20 per unit. An over-allotment option could increase gross proceeds to approximately $230 million.
Primaris said the proceeds will be used to fund future acquisitions and for general trust purposes. The disclosure is particularly notable given how aggressively the company has already expanded through acquisitions, including several major enclosed shopping centres previously owned by some of Canada’s largest institutional real estate investors.
It also points to a larger shift underway in Canadian retail real estate. Primaris has spent several years establishing itself as a repeat buyer of large regional shopping centres, while identifying portfolio rebalancing among institutional owners as a source of potential acquisitions.
Primaris Has Become a Major Buyer of Canadian Malls
Recent transactions show the scale of the strategy.
Primaris acquired Lime Ridge Mall in Hamilton for $416 million and Promenades St-Bruno near Montreal for $565 million, both from Cadillac Fairview. It also acquired Oshawa Centre and a 50 per cent interest in Southgate Centre in Edmonton as part of a $585-million transaction with Ivanhoé Cambridge.
Les Galeries de la Capitale in Quebec City was acquired in 2024 in a transaction valued at $325 million.
These are established regional shopping centres with significant positions in their respective markets. Primaris has been explicit that it sees Canada’s institutional ownership structure as a source of future transactions.
In investor materials, the REIT has estimated that approximately $50 billion of Canadian enclosed shopping centres are owned by large Canadian institutions. Primaris has identified portfolio rebalancing among those owners as one factor that could make additional properties available.
Chief Executive Officer Alex Avery has also told analysts that pension plans have been important vendors to Primaris, and that engagement with institutional sellers had increased as the REIT demonstrated its ability to complete large transactions.
Primaris said in early 2025 that it had acquired $2.4 billion of leading enclosed shopping centres from five of Canada’s 10 largest pension funds since the end of 2021. Its acquisition activity has continued since then.
The newly disclosed pipeline indicates that Primaris is evaluating another substantial group of potential transactions. The company has not identified the properties or sellers, and there is no certainty the negotiations will result in completed acquisitions.
Why the Same Mall Can Have Different Value to Different Owners
The transactions reflect different approaches to capital allocation.
Large pension funds and institutional real estate managers typically invest across multiple property types and geographic markets. Selling a Canadian shopping centre can therefore reflect portfolio allocation, liquidity or other investment considerations without necessarily indicating a negative view of the individual property or enclosed retail generally.
Primaris has a much narrower mandate. It is Canada’s only publicly traded REIT focused specifically on enclosed shopping centres, concentrating its management resources, retailer relationships and redevelopment capital in the sector.
Scale is an important part of that strategy. A larger national portfolio gives Primaris more locations to offer retailers pursuing multi-market expansion while spreading its internal management platform across a larger asset base.
The company has also been selective. Its acquisitions have focused on leading regional shopping centres while Primaris has continued selling properties it considers less aligned with its longer-term portfolio strategy.
That distinction matters as performance becomes increasingly dependent on asset quality. Canadian retail market reports from CBRE and JLL have pointed to constrained availability and retailer demand at stronger properties, while weaker shopping centres face different leasing and capital challenges. Very little new enclosed-mall supply is being built, adding scarcity to productive existing space.
Primaris is therefore making a concentrated bet on a particular segment of the mall market: regional shopping centres with strong market positions where leasing, redevelopment and active management can potentially increase income.
Former Hudson’s Bay Space Tests the Strategy
Hudson’s Bay’s store closures have provided an early test of that approach.
Primaris had approximately 881,400 square feet of former Hudson’s Bay space across its portfolio. By June, the REIT said 84 per cent had either been leased or was in advanced negotiations, including 58 per cent covered by long-term leases.
The rent differential is substantial. Primaris said 608,500 square feet covered by committed or conditional leasing was expected to generate approximately $9.2 million in annual net rent, compared with $2.1 million previously generated by Hudson’s Bay.
Across the 881,400 square feet leased or under negotiation at the time, projected annual net rent was approximately $14.9 million, compared with $3.7 million from Hudson’s Bay.
Those gains require significant investment. Primaris expects to spend approximately $175 million to $225 million on the former Hudson’s Bay redevelopment program and has projected yields above 10 per cent.
Avery previously told analysts that Primaris had heavily discounted Hudson’s Bay income when underwriting Galeries de la Capitale, Southgate Centre and Oshawa Centre because management expected the department-store spaces would eventually require redevelopment.
The subsequent leasing provides an important proof point for future acquisitions. At stronger malls, legacy anchor space carrying relatively low rents can potentially be repositioned for multiple tenants at considerably higher aggregate rents, provided the property can support the demand and the owner is prepared to invest the required capital.
Fresh Equity Adds Acquisition Capacity
Primaris reported approximately $655.1 million of liquidity and $4.9 billion of unencumbered assets at the end of the second quarter. Total debt represented 40.5 per cent of total assets, while average net debt to adjusted EBITDA stood at 6.0 times, the upper end of the REIT’s stated four-to-six-times target range.
The equity offering gives Primaris additional acquisition capital without adding an equivalent amount of debt.
Its timing is also notable compared with one of Primaris’s major financings last year.
When the REIT acquired Promenades St-Bruno for $565 million, it launched a bought-deal equity offering in connection with an identified acquisition. This time, Primaris is raising equity without publicly identifying a property purchase while simultaneously disclosing potential acquisitions with an aggregate purchase price exceeding $1 billion.
The company has not said how far individual negotiations have progressed or how much of the pipeline will ultimately result in completed transactions.
“Primaris continues to benefit from a strong balance sheet, growing cash flow and a differentiated portfolio of market-leading enclosed shopping centres,” Avery said in announcing the financing.
“This offering further enhances our financial flexibility and liquidity, positioning us to capitalize on attractive acquisition opportunities while maintaining our disciplined approach to capital allocation and leverage management.”
Canadian Mall Ownership Continues to Shift
The transactions Primaris has already completed show how the ownership map of major Canadian malls is changing.
Properties that spent years or decades inside diversified institutional portfolios are increasingly becoming part of a public REIT dedicated specifically to enclosed retail. Primaris is providing a source of liquidity for institutions choosing to sell individual assets while concentrating more of its own capital in the sector.
That does not mean Canada’s institutional owners are collectively exiting malls. Several remain among the country’s largest owners of high-quality retail properties, and the rationale behind individual sales varies.
What has changed is the presence of a specialized buyer capable of completing transactions worth hundreds of millions of dollars. Primaris now has a record of executing those deals, including transactions involving equity consideration, while its growing portfolio provides additional scale with retailers and in property operations.
Primaris currently owns interests in 14.6 million square feet of shopping centre space, with its share of the portfolio valued at approximately $5.2 billion.
The REIT has not identified the properties or vendors represented in its more than $1 billion of current acquisition negotiations. The next completed transaction will provide another data point on which major Canadian malls are coming to market, who is selling them and how aggressively Primaris intends to keep expanding.
