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Leyad has made its second major retail acquisition in two weeks, with the acquisition of seven single-tenant grocery stores leased to Loblaw Companies Ltd.
The 387,000-square-foot portfolio was acquired from a private, U.S.-based vendor in an off-market deal.
The newly acquired portfolio includes stores in British Columbia, Manitoba, New Brunswick, Nova Scotia, Saskatchewan and the Yukon Territory. The acquisition marks Leyad’s first investments in British Columbia and the Yukon and the Montreal-headquartered company now owns real estate in eight provinces.
Each of the acquired stores has served as a primary grocery destination in its community for decades, providing essential food and pharmacy services to residents and acting as a central piece of local retail infrastructure.
“They're located on the primary commercial arteries of each of their neighbourhoods,” Leyad chief executive officer Henry Zavriyev told RENX.
While there may be room for future intensification of some of the sites, Zavriyev said that’s not a priority in the near term.
Financial details were not disclosed.
Well-maintained stores with significant lease terms
Leyad will be the property manager for the stores, which have a weighted average lease term of about six years, according to Zavriyev.
“They’re on triple-net leases so Loblaw takes care of all the cap-ex programs,” he said. “They've all been very well maintained by Loblaw, which has to keep stores renovated in order to stay competitive. They're always improving the stores.”
With the addition of these assets, under the Real Atlantic Superstore, Real Canadian Superstore and Wholesale Club banners, Loblaw has become Leyad’s largest tenant by revenue.
“We are big believers in Loblaw’s long-term success,” Zavriyev said, acknowledging that other grocers and pharmacies anchor other retail properties that Leyad owns. He said they combine to contribute more than 20 per cent of its rental revenues.
Loblaw is widely regarded as one of the strongest retail covenants in Canada and it recently announced plans to invest $2.4 billion into its store network.
This latest acquisition reflects Leyad’s continued focus on durable commercial real estate tied to everyday consumer needs, with grocery-anchored properties increasingly forming the backbone of that strategy.
More acquisitions are expected soon
Leyad is a privately owned real estate investment and development firm that has a major focus on retail but also owns a large portfolio of multiresidential properties, seven industrial properties and two hotel properties.
Leyad has been in major growth mode over the past few years and just expanded its senior leadership team with a series of appointments and promotions.
This year alone, Leyad has made the $160.5-million acquisition of Winnipeg’s 160-store St. Vital Centre from the Ontario Pension Board, and earlier this month purchased the 37-store Lloyd Mall in Lloydminster, Alta. from the TTC Pension Plan for an undisclosed price.
Zavriyev expects to announce more acquisitions later in the second quarter of this year.
“We're going to continue increasing our exposure to these retail properties,” he said.
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