Crombie sells 50 per cent stake in nine retail properties

Crombie REIT (CRR-UN-T) is selling a 50 per cent stake in nine retail properties in Ontario, Alberta and British Columbia to Northam Realty Advisors Limited as it continues raising funds to redevelop some of its core holdings.

Crombie REIT has sold a 50 per cent interest in nine retail sites, including the Sobeys-anchored Brampton Plaza, to Northam Investments.

Crombie REIT has sold a 50 per cent interest in nine retail sites, including the Sobeys-anchored Brampton Plaza, to Northam Investments. (Google Maps image)

In an update on its dispositions thus far in 2018, the trust also announced it has closed on the sale of two Ontario shopping centres and on a commercial land deal in B.C.

Crombie also announced it has a pending $9-million sale of a drug store-anchored property in Napanee, Ont., at a capitalization rate below six per cent. The transaction is expected to close in June.

In all, the transactions are valued at about $142 million.

Nine retail sites

In the most recent move, Crombie says a subsidiary of Northam will buy a half interest in the nine retail sites. Seven are grocery-store anchored, the others are anchored by a drug store and a Beer Store. They comprise about 400,000 square feet.  

“We are very pleased with these transactions as it demonstrates solid execution of our multi-faceted funding strategy,” said Crombie president and CEO Don Clow in a release. “The proceeds from the 100 per cent sale of non-core properties and partial-interest sales of core, low-growth properties will be primarily deployed into funding higher net asset value growth development projects in Canada’s top urban markets.

“None of the nine partial-interest sale properties are included in Crombie’s mixed-use development pipeline.”

Northam is paying $78 million for its 50 per cent share, a cap rate below 5.5 per cent. The transaction is scheduled to close later this month, and Crombie will continue to manage the properties.

The nine properties are:

* 977 Golf Links Rd., Ancaster, Ont. Sobeys-anchored, 64,817 square feet;
* Brampton Plaza, 8975 Chinguacousy Rd., Brampton, Sobeys-anchored, 76,447 square feet; 
* 5048 16 Ave. NW., Calgary, Safeway-anchored, 42,014 square feet; 
* Millwood Sobeys, 5011 23 Avenue NW, Edmonton, 58,252 square feet; 
* 3130 Danforth Ave., Toronto, Beer Store-anchored, 6,450 square feet; 
* 8475 Granville St., Vancouver, Safeway-anchored, 47,485 square feet;
* Southbrook, 1109 James Mowat Trail SW, Edmonton, Sobeys-anchored, 45,206 square feet; 
* Nottingham, 688 Wye Rd., Sherwood Park, Alta., Sobeys-anchored, 45,679 square feet;
* McKenzie Towne, 110-620 MacKenzie Towne Gate SE, Calgary, Shoppers Drug Mart-anchored, 18,808 square feet.

Closed transactions

The properties which were sold outright are grocery-anchored shopping centres in Perth and Simcoe, Ont., as well as a property in Red Deer, Alta., which has a theatre as its tenant.

The two shopping centres were sold to M+H Properties in March for $36 million.

Crombie says the aggregate purchase price represents a cap rate of 6.5 per cent.

Crombie also sold land adjacent to its Belmont Market commercial development in Langford for about $5 million.

About Crombie, Northam

Crombie REIT is a national retail property landlord with a strategy to own, operate and develop a portfolio of grocery- and drug store-anchored shopping centres, freestanding stores and mixed use developments primarily in Canada’s top urban and suburban markets.

Northam is a full-service real estate advisory firm that invests and manages European institutional and private capital in top urban markets in Canada. 

Founded in 1971 in Canada, Northam has offices in Toronto, Luxembourg and Frankfurt employing about 70 staff and managing office, industrial and specialty retail properties in Canada’s major metropolitan areas.

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