Choice Properties REIT (CHP-UN-T) has acquired a 75 per cent interest in 154 acres of development land in East Gwillimbury, just north of Toronto, where Loblaw (L-T) plans to construct an automated, temperature-controlled distribution facility.
The property is located at the corner of Hwy. 404 and Green Lane East, giving it close access to the Greater Toronto Area’s network of major highways.
Rice Group is the vendor and will also remain involved in the project.
In Friday’s announcement, Choice Properties REIT said the initial investment in the development is about $170 million, including the land and site preparation.
“This development is a unique opportunity for Choice Properties to scale its existing industrial portfolio and further demonstrates the benefits of our strong and strategic relationship with Loblaw,” said Rael Diamond, president and chief executive officer of Choice Properties, in the announcement.
“The development is a significant opportunity in a key market to develop industrial land alongside the Rice Group, who is a long-standing development partner of ours.”
Choice acquired the 75 per cent interest via a previously arranged “equity conversion right” with Rice Group.
Choice to develop multi-phase industrial park
The development plan is for the trust to build a multi-phase industrial park with the potential for approximately 1.8 million square feet of logistics space. Choice and Loblaw entered into an approximately 100-acre land lease for the first phase at the property.
Preparation of the site is anticipated to take place over during the next 15 months.
The cost of the distribution facility is accounted for in Loblaw’s capital planning and projections. Loblaw expects to bring the facility into its operations in the first quarter of 2024.
“This new facility reflects our continued drive to advance our supply chain to better serve our customers and meet their evolving needs,” said Robert Sawyer, chief operating officer, Loblaw.
“This is also a strong demonstration of the benefits of our strategic relationship with Choice Properties.”
The project is one of several developments Choice now has underway across Canada.
As noted in its Q1 2022 financial results, projects include:
– high-rise residential projects in Brampton, Ont., next to the Mount Pleasant GO Station and the other in the Westboro neighbourhood in Ottawa.
– two active industrial projects expected to deliver about 600,000 square feet of new generation logistics space, at Horizon Business Park in Edmonton, and in Surrey, B.C.
Choice is also continuing to advance rezoning for 11 mixed-use projects representing over 10.5 million square feet.
It recently received zoning amendment approval for a significant mixed-use project at Grenville and Grosvenor Streets in Toronto.
About Choice, Loblaw and Rice Group
Choice Properties owns, operates and develops commercial and residential properties.
The REIT currently holds 114 industrial properties totalling 17.2 million square feet and has approximately 6.5 million square feet under development or in various stages of the rezoning and planning process.
Loblaw is Canada’s largest retailer, operating in the food and pharmacy, health and beauty, apparel, general merchandise, financial services and wireless mobile products and services sectors.
It has more than 2,400 corporate, franchised and associate-owned locations, employing more than 190,000 full- and part-time workers.
Rice Group is a vertically integrated retail, industrial and infrastructure developer supporting and providing site works, servicing, construction management and design and approval for internal projects and partnerships.
The company manages the development of a portfolio in excess of 1,200 acres primarily in the GTA.
The portfolio consists of approximately five million square feet of industrial and commercial space, with more than 10 million square feet in the pipeline.