An Ottawa shopping centre which is home to Canadian Tire’s new flagship quarter-million-square-foot store is being marketed for sale.

The 632,700-square-foot Carlingwood Shopping Centre is located along the Carling Avenue corridor in the city’s west end. It’s being marketed by TD Securities and the Cushman & Wakefield Ottawa office for property manager Strathallen.

In an email exchange with RENX, TD Securities’ director of real estate brokerage Elliot Medoff called the site a “rare opportunity to acquire a high-quality, well-tenanted shopping centre in a growing, transit-oriented neighbourhood providing stable cash flow and meaningful future development potential, 15 minutes west of downtown Ottawa.

“Anchored by Canadian Tire, Loblaw(s) grocery store, Rexall pharmacy and Dollarama, Carlingwood has an impressive group of core tenants which represent 65 per cent of the property’s total GLA.

Notably the property is home to Canada's largest Canadian Tire location occupying 263,500 square feet, with 19 years of lease term remaining.”

Canadian Tire leases former Sears location

The sprawling, two-level Canadian Tire store opened in 2022.

Strathallen demolished and redeveloped a former Sears box at the west end of the 30-acre property to accommodate Canadian Tire, which was moving its existing outlet from a location just east of the shopping centre.

It also contains a fitness centre, health-care tenants and three banks.

The Carlingwood site is also part of a city bus transit hub and near a future stop on Ottawa’s east-west light-rail transit line expansion which is currently under construction.

“In addition to the transit-oriented location within 800 metres of the New Orchard LRT Station, surrounded by substantial new mix-used development, the asset has been managed to the highest institutional standards for multiple decades with material investments made by both the vendor and tenants,” Medoff wrote.

Another attraction for potential buyers is that the property has considerable future intensification and redevelopment potential.

“A near-term opportunity exists to construct approximately 350,000 square feet of residential density on the northeast portion of the site,” Medoff wrote.

“From a long-ago term perspective, the property provides an opportunity for further intensification through a large, master-planned redevelopment.”

Redevelopment along Ottawa's Carling Avenue

The precedent for intensification is already in place along the Carling Avenue corridor, which connects the edge of downtown Ottawa with the suburban west end.

RioCan REIT (REI-UN-T) owns two regional shopping properties along the corridor, several kilometres east and west of Carlingwood, and is redeveloping both sites.

RioCan has a multi-tower residential intensification project underway at the Westgate shopping centre, and similar plans for the former Lincoln Fields shopping centre. At both sites, retail buildings are being redeveloped in multiple phases with mixes of residential and commercial/retail assets.

As is the case at Carlingwood, both those properties will have nearby access to the expanded LRT system.

Medoff said there continues to be investor interest in well-located and well-tenanted retail properties even as the sector retools to accommodate an increase in e-commerce and navigates an uncertain economy.

“As an asset class, retail has outperformed in 2023 amid overall negative market returns,” Medoff wrote. “Strong demand remains for necessity-based, grocery-anchored retail on large pieces of land.”

He cited the recent sale of Conestoga Mall to Primaris REIT (PMZ-UN-T) for $270 million as one example. The 585,000-square-foot mall sits on a 49.8-acre property.

“Our team recently represented Ivanhoé Cambridge on the sale of Conestoga Mall, in Waterloo, Ont., to Primaris REIT. This marquee transaction closed last week and demonstrates the strong interest in the sector from not only private capital, but also from publicly traded issuers.”