Allied Properties REIT (AP-UN-T) will add a major office property to its assemblage in Montreal’s International Quarter, at the edge of the downtown core. The REIT has an agreement to purchase the 747 Square-Victoria complex, also known as World Trade Centre Montreal, for $276 million.
747 Square-Victoria is a class-I complex located in the heart of the International Quarter, a heritage- and amenity-rich area that connects the downtown core with Old Montréal. Comprised of 519,574 square feet of office space, 43,015 square feet of retail and 858 underground parking spaces, 747 Square-Victoria was completed in 1992 and incorporates several several historic structures along the Ruelle des Fortifications laneway.
It spans almost a full city block and Allied says the complex is “essentially connected to” its adjacent properties at 700 de la Gauchetière St. W. and 425 Viger Ave. W.
When the acquisition closes, it will give Allied almost two million square feet of properties in that assembly.
Allied purchased 700 de la Gauchetière earlier this year for $322 million from Dream Office REIT. 425 Viger remains under redevelopment, including a 10-storey expansion which will increase the historic office property to about 300,000 square feet of gross leasable area.
Serve knowledge-based tenants
The purchase is intended to enhance Allied’s ability to serve knowledge-based organizations in urban Montréal in the TAMI (tech, advertising, media and information) sectors.
“Montréal has emerged as a premier urban environment in Canada for knowledge-based organizations,” Allied said in a release late Monday.
“This derives in large part from the number and quality of the institutions of higher learning in the city. The scale and quality of the built-legacy in Montréal has also contributed to its remarkable emergence in the past decade.”
Allied has been active in the Montréal region since 2005, but has made several major acquisitions in the past year or two.
It currently owns 20 urban properties in Greater Montreal comprising 5.6 million square feet of GLA, including 700 de la Gauchetière (1,000,969 square feet), 5445 and 5455 de Gaspé Ave. (969,558 square feet), Cité Multimédia (958,849 square feet) and Nordelec (877,376 square feet).
747 Square-Victoria was previously owned by Ivanhoé Cambridge.
The acquisition is subject to regulatory approval, but Allied has already completed its due diligence.
World Trade Centre Montreal
The office building is home to about 50 tenants, while retailers line the inner courtyard and laneway.
747 Square-Victoria is connected to the 357-room Hotel InterContinental and is a short walk from the Place Victoria Metro station.
The city block is bounded by Saint-Antoine on the north, Saint-Pierre on the east, Saint-Jacques on the south and Square-Victoria on the west.
During construction in the early ’90s. 747 Square-Victoria was created by integrating several heritage structures along Saint-Antoine and Saint-Jacque with a new structure along the laneway to Square-Victoria.
The laneway rises to a glass canopy along the roofline of the integrated structures, forming an atrium that facilitates access to the retail and offices within the complex.
Allied said the structures could also accommodate about 60,000 square feet of additional office space by transforming portions of the common areas. The complex is 90.7 per cent leased and has a weighted-average lease term of over six years.
Allied is funding the acquisition on an “essentially leverage-neutral basis” with its recently completed $345-million equity offering. It’s one of three “infill” acquisitions Allied has made with the proceeds, including other properties in Toronto and Calgary.