Quebec developer Immostar and Toronto-based Primaris REIT have acquired two retail properties adjacent to Les Galeries de la Capitale in Quebec City for $62.3 million, transactions which grant total control over the site and could translate into future development.

The two companies acquired and closed on the north and south open-air retail centres adjacent to the shopping mall, which is already owned, managed and leased by Primaris. The two properties, collectively named Complexes Capitale, total 307,900 square feet of gross leasable area on 29 acres of land and are 100 per cent leased to national tenants.

Immostar is the managing partner in the transaction with a 75 per cent interest, while Primaris is the non-managing partner owning a 25 per cent interest. Immostar also worked with Primaris when it acquired Les Galeries.

“With this acquisition it is possible for us to extend the future development, the future opportunities to these sites that are surrounding Les Galeries,” François Pelchat, a partner at Immostar, said in an interview with RENX.

Immostar’s head office is connected to the north centre and across the street from Les Galeries, he noted.

In an interview with RENX in December, Primaris's CEO Alex Avery outlined his strategy to intensify sites in its portfolio, naming Les Galeries specifically.

Primaris (PMZ.UN-T), an enclosed shopping centre-focused REIT, acquired the over one-million-square-foot Les Galeries for $325 million in 2024.

Immostar is a developer, manager and investor of commercial, industrial, residential and office real estate.

Positioning Immostar for the future

Tenants at Complexes Capitale include Rona, BMO, Adonis Mediterranean Market, McDonald’s and Golf Town. The two open-air retail centres were acquired from Groupe Mach, a Montreal-based developer, Pelchat said.

Pelchat said the future of Lebourgneuf Boulevard, the road that grants access to Les Galeries, is “amazing” because of the densification taking place around the mall. He noted the upcoming expansion of Quebec City’s tramway, which would extend to Lebourgneuf Boulevard and introduce more potential customers, and the potential for residential and commercial development near the north retail centre.

“This is why it’s important for us to position ourselves today for the future. Maybe it’s going to be eight, 10 years, but now it’s our buildings, it’s our land,” Pelchat said. “When the future transportation will be there, it will be an amazing opportunity for us to redevelop and maybe see where the market will be in 10 years.”

For now, Immostar will focus on keeping its tenants happy and managing the properties, he added.

Immostar takes renewed interest in retail

Immostar is focused on expanding its commercial real estate presence in Quebec City via the transaction, Pelchat said.

After focusing on primarily residential real estate for years, Pelchat said Immostar sees it as “important for us to rapidly add new commercial after this transaction.” The company sold a major stake in its commercial portfolio, so key to the strategy is searching for more large markets like Quebec City, he added.

When asked if the plan includes Montreal, Pelchat said “not for now.” Immostar's current plans also include more major industrial and residential development in Quebec City, Pelchat said.