Halifax Shopping Centre sold for $370 million

Halifax Shopping Centre and the Annex have been sold to Primaris Real Estate Investment Trust for $370 million in cash and units of the trust.

Closing is scheduled for November 30, subject to closing conditions that include approval from the Toronto Stock Exchange. Approval under the Competition Act has already been granted.

“Halifax Shopping Centre and the Annex exemplify the quality and market-leading nature of Primaris REIT’S target acquisition profile. The shopping complex is extremely well located in central Halifax, adjacent to Halifax Transit’s Mumford Terminal and at the gateway to the Halifax peninsula … in one of Canada’s fastest-growing mid-sized population centres,” said Patrick Sullivan, president of Primaris in a release. “With very strong sales performance trending above $1,000 per square foot, this acquisition enhances the REIT’S portfolio value proposition with retailers and offers a significant income growth opportunity consistent with the growth we see ahead for our existing assets.”

Primaris credits its “differentiated financial model, including very low leverage, a low payout ratio and significant retained free cash flow,” for the acquisition.

“We are very pleased to add Atlantic Canada’s premiere shopping centre complex to the Primaris portfolio,” said CEO Alex Avery. “This acquisition further demonstrates Primaris as an attractive buyer for Canadian pension fund vendors of market-leading Canadian shopping centres, with multiple discussions continuing for further acquisitions. Primaris is uniquely positioned as a buyer, with institutional scale as the second largest owner-operator of enclosed shopping centres in Canada with proforma assets of approximately $3.9 billion, a differentiated financial model featuring a very wellcapitalized balance sheet, and a clear mandate for growth.”

HALIFAX SHOPPING CENTRE

Primaris calls Halifax Shopping Centre “Atlantic Canada’s leading regional enclosed shopping centre,” in the highgrowth market of Halifax, and it also likes the mall’s access to transit.

As of September 30, annual all-store sales volume was $260.8 million, with 69 per cent in-place occupancy, and 96 per cent committed occupancy.

The former Sears space has executed leases commencing over the next few months that include Simons, Winners, Dollarama and Petsmart.

Primaris noted HSC tenants unique to the region, such as Apple, Aritzia, Michael Kors, Victoria’s Secret, Browns, and Nespresso, plus other notable tenants like Sephora and Lululemon.

THE ANNEX

Across Mumford Road, the Annex has a bus terminal on site, as well as committed occupancy of 94 per cent.

The site has been designated as a future growth node by the city, enabling residential and mixed-use development, with approximately 5,500 residential units planned for the future.

Large format tenants include Walmart, Sobeys, and Dollarama, as well as the NSLC, Mark’s Work Wearhouse, Shoppers Drug Mart, and the Bank of Montreal.

HALIFAX AND ITS GROWTH

Primaris said it took into account Halifax’s significant population expansion, with forecast growth of 18.4 per cent by 2033.

The company said the Halifax Shopping Centre will become one of the REIT’S highest sales productivity properties, ahead of properties in Waterloo and Kelowna.

THE PRIMARIS REIT

Primaris is Canada’s only REIT focused on enclosed shopping centres, with ownership interests primarily in growing markets, and a portfolio totalling 37 properties, or 12.5 million square feet, valued at approximately $3.9 billion.