Primaris Real Estate Investment Trust announced Wednesday that it has agreed to acquire a 100% interest in Upper Canada Mall in Newmarket, Ontario for $411 million, to be satisfied in cash. The REIT said the acquisition further advances Primaris’ strategy of acquiring market-leading enclosed shopping centres in growing Canadian markets, where the REIT can deploy its full-service operating platform to drive income growth and long-term per unit value creation.
Highlights
- The acquisition is expected to be modestly accretive to annualized fully diluted FFO per unit;
- 990,114 square foot mall located on 76 acres of land in the Greater Toronto Area;
- $888 per square foot same store sales productivity and total annual CRU sales volume of $271 million;
- Attractive tenant profile including Apple, Aritzia, Browns, Lululemon, Sport Chek, Uniqlo, Winners, and more;
- Significant upside available from lease-up of vacant space and monetization of excess land; and
- The acquisition is expected to close by October 31, subject to the satisfaction of customary closing conditions, including any required regulatory approvals.
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 $5.6 billion at Primaris’ share.
Upper Canada Mall is co-owned by Oxford Properties and CPPIB and managed by Oxford Properties Group.
“Upper Canada Mall is a dominant GTA shopping centre with strong demographics, an exceptional tenant mix and significant embedded growth potential,” said Patrick Sullivan, President and Chief Operating Officer. “We see meaningful opportunities to grow NOI through leasing, active asset management and operational efficiencies. Our platform and operating expertise position us well to unlock that potential over the coming years.”
“Interest in enclosed shopping centres is growing, and Upper Canada Mall was the subject of a broadly marketed process,” said Julian Schonfeldt, Chief Investment Officer. “Our reputation as a well-capitalized, reliable buyer with a proven operating platform continues to position Primaris as a preferred counterparty for vendors. This acquisition reflects our disciplined approach: a productive, high-quality centre in the GTA, that is modestly accretive, with additional upside from lease-up and excess land.”
“Upper Canada Mall is exactly the type of asset Primaris is built to own,” said Alex Avery, Chief Executive Officer. “The acquisition adds a high quality GTA shopping centre to our portfolio and further strengthens the quality, scale and growth profile of Primaris. Driving our proforma same store sales productivity to $829, this acquisition is another important step in building Canada’s leading portfolio of market dominant enclosed shopping centres.”
Upper Canada Mall Property Highlights
- Leading regional enclosed shopping centre located in Newmarket, Ontario, a suburb of the GTA;
- Strategically located at the intersection of Yonge Street and Davis Drive, with convenient access to Highways 400 and 404;
- Bus Rapid Transit terminal located adjacent to the south entrance, with the Newmarket GO Station approximately 1.8 kilometres away;
- 990,114 square foot mall located on 76 acres of land, with approximately 23% site coverage;
- $888 per square foot same store sales productivity and total annual CRU sales volume of $271 million;
- 65% long-term in-place occupancy, 70% in-place occupancy, and approximately 80% committed occupancy (excluding the vacant HBC space, in-place occupancy is 82%);
- Weighted average lease term of 4.2 years;
- Significant investment in the property, including an expansion completed in 2008 that added 148,000 square feet of retail space and a new food court, the opening of Market & Co. in 2018, and a new Yonge Street entrance completed in 2025;
- BOMA BEST Platinum certified;
- Large-format tenants include Winners, Sport Chek, Aritzia, Uniqlo and Zara; and
- Notable CRU tenants include Apple, Sephora, Lululemon, Victoria’s Secret, and Browns.
Primaris said Upper Canada Mall will become Primaris’ 4th largest shopping centre measured by total CRU sales volume.
It said the property offers 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.
It said opportunities to increase Net Operating Income include:
- Redemise and lease approximately 263,400 square feet of former anchor and large format space to strong covenant, high-quality national retailers;
- 142,800 square feet of former Hudson’s Bay is under negotiation;
- 47,600 square feet of former Toys R Us is under negotiation;
- 73,000 square feet former Sears spaced is committed to two national retailers;
- 33,800 square feet of vacant CRU space to strong tenants at market rents;
- Identified over 6 acres of excess land available for potential retail pad development or monetization; and
- Leverage Primaris’ platform to deploy its cost management strategy.
Recently, Primaris said it 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.
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