An artist’s rendering of Cominar REIT’s proposed redevelopment at Montreal’s Gare Centrale (Central Station). (Courtesy Cominar)

Cominar REIT plans to add as many as 1,800 residential units to its largest property, Gare Centrale (Central Station) in downtown Montreal.

Central Station is just one of 10 Cominar properties in Quebec which offer intensification opportunities with a potential of close to 10,000 residential units, the REIT says.

“Gare Centrale is an asset with extraordinary potential,” said Marie-Andrée Boutin, executive vice-president, retail and development at Cominar REIT (CUF-UN-T). She was speaking at the Montreal Real Estate Strategy and Leasing Conference on Oct. 2.

“Cominar is in transformation right now,” Boutin added.

Cominar forms development task force

In a subsequent presentation to institutional investors and strategic initiatives update on Oct. 4 in Toronto, Cominar announced it has formed a task force to explore options to maximize the value of Central Station and other properties.

Central Station, with 1.726 million square feet of gross leasable area, is “one of the best development sites in the country,” according to Cominar.

It has six distinct segments, of which four are generating net operating income (NOI): CN Tower with 649,000 square feet of office space; railway leases for commuter trains, VIA Rail and Amtrak; parking; a retail gallery with 45 stores; air rights; branding and advertising.

Central Station has annual traffic of 50 million people and provides direct access to Montreal’s underground city and the Bonaventure Métro station. 

Other intensification prospects

Aside from Central Station, a number of Cominar properties in the Montreal area have the potential to house residential units, the REIT says: Champlain shopping centre (1,100 residential units), Place du Commerce (1,200 units), Place Longueuil (500 units), Montenach shopping centre (500 units), Centropolis (500 units) and Quartier Laval (2,500 units).

Cominar REIT CEO Sylvain Cossette. (Courtesy Cominar)

In the Quebec City area, Îlot Mendel could accommodate 1,000 residential units and Carrefour Charlesbourg has the potential for 150 units. Galeries de Hull in Gatineau could also house 300 units.

Cominar told investors it is conducting ongoing discussions with urban planners, architects and municipalities, though some properties would require zoning changes to accommodate housing.

A “deep dive analysis” of the optimal strategy is underway on a case-by case-basis that could involve the sale of air rights, standalone development projects or partnerships.

Cominar’s strategic plan for long-term value creation, includes growing NOI, optimizing the portfolio and strengthening the balance sheet, CEO Sylvain Cossette and executive vice-president and chief financial officer Heather C. Kirk told investors.

It plans to optimize its portfolio by capitalizing on its strength in Montreal and on its industrial portfolio, among other things.

The REIT has 129 industrial properties in Montreal with 12 million square feet and a value of $1.059 billion.

Its office portfolio in Montreal numbers 50 properties with 6.6 million square feet and a value of $1.5 billion. On the retail front, its marquee retail properties in the city include Alexis Nihon Plaza, Rockland Mall, Centropolis and Centre Laval.

Properties near future transit stations

At the Montreal Real Estate Strategy and Leasing Conference, Boutin said Cominar has a number of properties near stations of Montreal’s upcoming REM light-rail system which could be densified into housing and some office towers.

The process is underway, she said.

Cominar also has a number of Quebec City assets near the new tramway and trambus system slated for completion in 2026.

Overall, 32 per cent of Cominar’s asset value (or $2 billion) is close to future transit system networks in Montreal and Quebec City, the REIT says.

Speaking to investors in Toronto, Boutin added its retail portfolio has a number of growth opportunities. The redevelopment of former Sears stores offers the opportunity to increase NOI and net asset value and enhance the REIT’s retail tenant mix, she said.

So far, 68 per cent of former Sears spaces have been leased and will generate 56 per cent higher rental income, Boutin said.

Cominar also has a “meaningful opportunity” to enhance its food offering, which currently accounts for only 5.9 per cent of its total retail leasable area.

Cominar’s new “people-oriented” image

Boutin said the trust will increase its focus on specialty leasing, including pop-ups, start-ups, lucrative events, branding and advertising revenue.

Cominar has also announced a new “people-oriented” brand image dubbed “People Forward.”

The company says the new vision will help it transform from a functional brand to a relational brand and “from a company that leases out space to a creator of living environments.”

Cominar shares on the TSE closed at $13.76 on Monday, a $0.38 (or 2.84 per cent) increase from the previous day’s trading.

BMO Capital Markets analyst Jenny Ma raised the price target on Cominar to $15.50 from $14 following the REIT’s investor day. 

Analysts at National Bank on Monday also raised its 12-month target price to $16 maintaining an “outperform” rating on the stock.