Montreal-based Leyad continues to build its retail portfolio with the $160.5-million acquisition of Winnipeg’s St. Vital Centre from Ontario Pension Board (OPB).

“It’s part of a trend of pension funds rejigging their portfolio cash allocations amongst the different real estate classes,” Leyad president and chief executive officer Henry Zavriyev told RENX about OPB’s decision to sell.

More than 10 groups made offers for the more than 900,000-square-foot mall in a competitive bid process run by RBC Capital Markets Real Estate Group, according to Zavriyev.

“It just shows the strength of retail and growing liquidity for this type of asset,” he said in an interview. “St. Vital is one of the two most important shopping centres in Manitoba.”

The transaction was financed through a syndicated loan provided by six credit unions.

St. Vital Centre’s tenants

St. Vital Centre opened in a high-income area of Winnipeg at 1225 St. Mary’s Rd. in 1979. It has undergone several renovations and upgrades over the years.

St. Vital Centre attracts more than eight million shoppers annually and the major tenants among its 160 retailers and service providers include Walmart, SilverCity, SportChek, Marshalls, HomeSense, London Drugs, Indigo, Mark’s, Fit4Less, Ardene and Dollarama. 

UNIQLO will move into St. Vital Centre in the next few months.

“We're finishing a number of spaces now in the centre for new tenants, and the space for UNIQLO needs to get finished,” Zavriyev said.

Efforts to fill vacant former HBC store

St. Vital Centre has a vacant former Hudson’s Bay Company (HBC) store that Leyad is looking forward to filling. Leyad announced on Feb. 2 that it had committed tenants for 83 per cent of the 323,000 square feet of empty HBC space in its other malls in the wake of last year’s bankruptcy of Canada’s oldest retailer.

“There's a lot of value to create there for the community,” Zavriyev said. “We've been quite successful in finalizing deals across the country in our vacant HBC spaces and part of our interest in St. Vital was the ability to add value to the centre by backfilling this one.”

While other potential owners may have considered demolishing the former HBC store, Leyad is already working on tenancy options for the space. Zavriyev is hopeful he’ll be able to announce something in the next couple of months.

The St. Vital Centre site has lots of space allocated for parking and additional room for future intensification that Leyad will consider taking advantage of in the long term, but for now its focus is to add value to the existing retail space.

“OPB has been a great steward of the property along with (former property manager) BGO, and we are really looking forward to continuing their legacy with the asset and owning and managing it for the long term,” Zavriyev said.

Leyad’s retail portfolio

Leyad has been actively acquiring shopping centres across Canada over the past few years and its other 200,000-square-foot-plus retail properties include: 

• Londonderry Mall in Edmonton;
• Niagara Pen Centre in St. Catharines, Ont.;
• Northgate Shopping Centre in North Bay, Ont.;
• St. Albert Centre in St. Albert, Alta.;
• Reed Crossing in Grande Prairie, Alta.;
• Cornerstone Prince Albert in Prince Albert, Sask.;
• Mega Centre Lebourgneuf in Quebec City; and
• Wheeler Park Power Centre in Moncton, N.B.

More retail acquisitions are expected

This latest acquisition, which is served by several Winnipeg Transit bus routes, fits well with Leyad’s growth strategy.

“We're really looking forward to having operational synergies across the country among the various centres, and driving value at the centres that we manage today,” Zavriyev said.

Leyad is looking at other assets similar to St. Vital Centre and he’s hopeful he’ll be able to make more acquisition announcements later this year.

The privately owned real estate investment and management firm also owns seven industrial properties, six multi-residential properties and two hotel properties.