Leyad’s busy 2024 is continuing with the off-market acquisition of Quebec City’s 341,000-square-foot Mega Centre Lebourgneuf shopping centre from Choice Properties and OPTrust for $66.5 million.

This is the second major retail transaction in Quebec City in less than a month. Groupe Mach and Sarees Investments recently acquired Les Promenades Beauport, which offers more than 125 stores and services in a gross leasable area of approximately 600,000 square feet, from Cominar for $80 million.

“Transaction activity has picked up in retail,” Leyad chief executive officer Henry Zavriyev told RENX. “I think that the market has become more confident in the product.”

Leyad’s recent retail acquisitions have been from public entities, as Zavriyev said they’ve “been the best stewards and owners of properties. 

“They’ve done a great job running these properties over the last 20 or 30 years and that's part of the piece for us. There's really limited cap ex to do. They’re really well-maintained properties.”

Mega Centre Lebourgneuf’s selling points

Zavriyev was sold on Mega Centre Lebourgneuf’s location at 5600 Boul. des Gradins, as it’s positioned near major highways and is easily accessible for both local shoppers and visitors from nearby regions. Residences and other nearby retail make it an attractive node in Quebec’s capital city.

The unenclosed mall’s 34 tenants include Costco, Canadian Tire, Sail, Maxi, Linen Chest, Value Village, Dollarama, The Home Depot, Structube, Sports Experts and Staples.

“It's all your general AAA national retail tenants,” Zavriyev explained. “It fits the profile of the kind of centres we've been buying over the last year and what we'll continue buying.”

Mega Centre Lebourgneuf had four vacancies, but two were filled during Leyad’s due diligence process and Zavriyev is confident the remaining two will be filled imminently.

“There’s a lot of interest and they’re pretty easy spaces to lease since they’re smaller spaces,” Zavriyev explained.

Future high-density residential development potential

The 43-acre site has 1,550 parking spots and is a prime candidate to add high-density residential development in seven to 10 years, according to Zavriyev, who believes it could accommodate 4,000 to 5,000 units.

Montreal-headquartered Leyad has other retail acquisitions in due diligence and Zavriyev plans to close on a few of them before the end of the year.

“They’re really well-located retail power centres with AAA national tenants that have very good covenants, and we're confident that they will be good tenants no matter where the market goes over the next few years,” he said.

“I think there's a dislocation in retail between the pricing and what I think the real value should be,” Zavriyev added. “It's just too mispriced right now because there's not enough liquidity in retail.

“Liquidity is in residential and industrial, but I think that will change over the next few years. So right now we're just looking for yield and we can get it in retail. As long as the tenants are national tenants and the covenants are there, then we're very comfortable with the product.” 

Leyad’s other 2024 retail acquisitions

Leyad’s acquisition of Mega Centre Lebourgneuf follows other retail purchases by the company this year.

• Cornerstone Prince Albert in Prince Albert, Sask. was acquired from Choice Properties and Springwood Developments for $94 million in June. The power centre comprises about 440,000 square feet of leasable space, with anchor tenants including Sobeys, Rona, Michaels and Shoppers Drug Mart.
• Leyad acquired the Garden City Square power centre at 783-915 Leila Ave. in Winnipeg from Primaris for $32 million in June. The 162,209-square-foot centre sits on 15.7 acres and is fully leased to tenants including Staples, Mark’s, Liquor Mart, Moores, McDonald’s, Marshalls, Dollarama and Planet Fitness.
• Leyad acquired the four-storey, 79,000-square-foot Johnston Terminal at 25 Forks Market Rd. in Winnipeg for an undisclosed price from Winnipeg-based Artis REIT in April. The multi-tenanted retail, commercial and office building was originally a railway warehouse in the 1920s before it was refurbished. 
• Leyad began the year by acquiring the 182,031-square-foot North Sydney Mall, which sits on 21.23 acres of land in North Sydney, N.S., for an undisclosed price from Econo-Malls in February.