Crestpoint Real Estate Investments Ltd. has invested over $300 million to acquire major properties in two Canadian cities; Centre on Barton shopping centre in Hamilton, and South Surrey Business Park in Metro Vancouver.
Both were acquired from IMCO as part of Crestpoint’s core-plus fund strategy.
“We negotiated this deal off market,” said Devon Howsam, Crestpoint’s vice-president of acquisitions and asset management. “It started with this industrial property in the greater Vancouver area. Targeting industrial in Vancouver and Toronto have been a focus for us. Especially class-A product like this.
“The conversation expanded into a larger deal which included the retail property in Hamilton.”
While industrial assets are coveted and sought by investors across the country as logistics and ecommerce booms, the Centre on Barton is one of the few major retail transactions to occur in Canada since the beginning of the pandemic. However, with a largely needs-based tenant roster and its urban location, Crestpoint found the asset attractive.
“To grow the portfolio with such high-quality assets in a difficult environment, especially in the industrial sector, should provide long-term tangible benefits to our portfolio,” said Kevin Leon, president and founder of Crestpoint, in the announcement. “Despite a challenging year, Crestpoint managed to acquire over $700 million of high-quality properties across Canada in 2020.”
And it continues to seek more acquisitions.
“The mandate for us to continue purchasing is always there,” Howsam told RENX. “The current climate of the economy makes it more difficult, but our interest and desire to buy more property has not changed.”
South Surrey Business Park
The park comprises four fully leased properties at 2920 188th St., 18899 28th Ave., 18880 30th Ave. and 2945 190th St, in Surrey, with easy access to the Canada-U.S. border.
The state-of-the-art, multi-tenant industrial park was built between 2018-2020 by Hopewell Development. It sits on a 38.9-acre site and comprises 731,000 square feet of leasable space.
“The ability to access an acquisition like this doesn’t come along every day,” Howsam said. “It’s very difficult when these deals are widely marketed, so if we have the opportunity to source these off-market that’s always a win for us. We’re very excited to have this in our portfolio.
“These properties have been developed over the past few years and the pace of the Vancouver market hasn’t slowed down, so the current market rents are well above the contractual rents in place.”
The buildings feature 32-foot clear heights, over 150 loading doors and an abundance of parking. Occupying a full city block, the property is located close to four municipal roads and multiple highways.
It is fully leased to a roster of tenants which include Amazon and DSV Solutions.
The Centre on Barton
Centre on Barton is a 677,000-square-foot regional shopping centre on 66.4-acres at 1275 Barton St. E. The site was converted from an enclosed mall to a big-box format about a decade ago.
It’s now comprised of 23 buildings and is 87 per cent leased to over 60 national and regional tenants. Anchored by Walmart, Metro and Canadian Tire, it also has a diverse roster of ancillary tenants including Shoppers Drug Mart, LCBO, The Brick, Staples, Marshalls, Giant Tiger, Dollarama and all five Schedule I Canadian banks.
“The retail industry is bifurcated right now, and our focus is on service-oriented retail. A lot of people are shying away from retail altogether, however we see this as an opportunity to service-oriented, grocery-anchored retail. This fits that bill exactly,” Howsam said
“If you look at the tenant roster with WalMart, Canadian Tire, Metro, banks, Shoppers Drug Mart, LCBO, they all fit the bill for the types of tenants that are doing well. As you’ve seen over the past year these service-oriented retail centres are recession-proof. They are doing quite well.”
“When you actually dig into the rent roll it is quite a stable asset.”
The site offers local and regional access as it sits between the Queen Elizabeth Way and downtown Hamilton. It’s within close proximity to several bus routes and GO Transit stations.
Big-box format offers flexibility
“That’s one of the unique features that we like about it, it has a suburban power centre feel but it’s located in an urban location,” Howsam said. “Which is an interesting combination, because there is a huge population base that surrounds the property and that’s seen by the performance of the tenants, who are doing quite well.”
The big box format also offers a lot of flexibility moving forward as the retail landscape continues to change. Howsam said there is opportunity both for adapting the existing structures to evolving conditions, and for further densification.
“The retail world is evolving, it’s not dying,” he explained. “We see that big box format and the industrial world colliding. When you look at the size of these big box retailers, long term you could potentially see a last-mile use if feasible.
“Obviously the increased demand for e-commerce is well suited for what we have here, for the existing tenants as well as the built form. The existing structures are well suited to help these tenants with their distribution needs.”
Although new construction at the site is not in Crestpoint’s immediate plans, Howsam said that is another option in the future depending on market conditions.
Crestpoint Real Estate Investments Ltd.
Crestpoint Real Estate Investments Ltd. is a commercial real estate investment manager with $5.3 billion of gross assets under management.
Crestpoint is part of the Connor, Clark & Lunn Financial Group (CCL), a multi-boutique asset management company that provides investment management products and services to institutional and high net-worth clients. CCL and its affiliates manage over $85 billion in assets.