Broccolini has moved into grocery-anchored retail, an asset class the Montreal-based developer says is greatly under-supplied in Canada.

"We’re bullish on the asset class because for a long time there’s been very little of this type of development,” said Michael Broccolini, Broccolini’s chief investment officer and president of real estate, in an interview with RENX. “Typically, it was more concentrated with some of the REITs and the REITs have not been developing for many years.” 

With Canada’s substantial population growth over the past 10 years, “our view is that the market is under-supplied. Grocers are looking to add stores to their networks.”

Broccolini views the move into grocery-anchored retail “as a great way to diversify our investments” that is complementary to its other real estate activities. Sourcing grocery-anchored retail sites will lead to development opportunities for multifamily, self-storage and industrial, all asset clases in which Broccolini is currently involved.

Broccolini's retail team, and immediate plans

To get its grocery-anchored retail division off the ground, Broccolini has hired a three-person team in Toronto with decades of retail experience, headed by Stefan Savelli, vice-president, retail. 

Savelli, who was previously at ONE Properties and Trinity Development Group, has worked in retail for his entire 30-plus-year career. He has been involved in everything from acquisition, development and leasing to construction and disposition at more than 55 shopping centres across the country.

The company’s other hires for its grocery-anchored retail division are Wahab Momin, senior analyst, retail and Robert Mulvale, senior director leasing (retail). Savelli, Momin and Mulvale worked together at ONE Properties.

Broccolini is close to finalizing its first grocery-anchored deals and hopes to break ground on the first development, which will be in the GTA, sometime this year.

“That might be a little bit optimistic but that certainly is a goal,” Savelli said.

No goal has been set as to how many grocery-anchored retail properties Broccolini aims to develop, but “we want to do as much as we can,” Broccolini said, with a focus on sites in primary and secondary markets across the country.

He added moving into grocery-anchored retail will give Broccolini a presence outside of its current markets of Quebec and Ontario. 

“That’s another reason why we’re doing this,” Broccolini said. “We build a lot for different Fortune 500 companies in Quebec and Ontario. They also have project needs in the Maritimes or Western Canada. This is just going to help us service our customers across the country.”

The real estate Broccolini is seeking

Savelli said Broccolini will be looking for five- to 12-acre sites, large enough to house grocery stores from 34,000 to 100,000 square feet in size, along with additional retailers such as dollar stores, pharmacies and restaurants and professional services like medical and dental offices.

Traditional shopping centres are “certainly what’s most desirous for investors,” he said, adding that Broccolini is not aiming to build enclosed malls. “That’s not what investors are looking for today. That’s certainly not where the returns are.”

Savelli noted that grocers are currently the most active group in retail in Canada, and that Broccolini’s move into grocery-anchored retail could lead to industrial development opportunities from grocers seeking distribution spaces.

Plans for new multifamily development

Elsewhere, Broccolini said his firm will probably launch three purpose-built multifamily rental projects this year in Montreal and hopes to launch one rental project in Toronto. The company is also seeking additional sites for purpose-built rental developments.

Last summer, after several decades of condo developments, Broccolini announced plans to build a two-phased, purpose-built rental project with more than 800 units in Montreal's Bridge-Bonaventure district. The rental development – the 77-year-old company’s first in more than 50 years – will include an affordable housing component.

While Broccolini will finalize construction this year of its 25-storey Le Sherbrooke condo development on Sherbrooke and Guy streets in downtown Montreal, “I think the new (condo) construction market is going to be quiet for the foreseeable future,” Broccolini said.

Broccolini has opened two self-storage facilities under its new Pandora banner and a third will start construction in the next couple of months, Broccolini said. The company’s goal is to acquire three or four additional sites for self-storage facilities in major cities of Quebec and Ontario this year and to begin construction toward the end of 2026 or in 2027. 

On the industrial front, Broccolini is aiming to wrap up a half-dozen design-build projects in Quebec and Ontario over the next few months.