RioCan creates new JVs with Killam, Boardwalk

IMAGE: A portion of the Elmvale Acres shopping centre property in East Ottawa will be co-developed into a multiresidential tower by RioCan and Killam. (Google Street View)

A portion of the Elmvale Acres shopping centre property in East Ottawa will be co-developed into a multiresidential tower by RioCan and Killam. (Google Street View)

RioCan REIT (REI-UN-T) is expanding its existing partnerships with Killam Apartment REIT and Boardwalk REIT to facilitate multiresidential development opportunities at two of its shopping centres in Ottawa and Mississauga.

Killam (KMP-UN-T) has a firm agreement to purchase a 50 per cent interest in a 1.45-acre portion of RioCan’s Elmvale Acres Shopping Centre in Ottawa. Boardwalk (BEI-UN-T) has purchased a 50 per cent interest in just over two acres of property at the Sandalwood Square in Mississauga, just west of Toronto, both to build mixed-use projects on the properties.

“These two transactions are the most recent examples of the inherent value in RioCan’s major market portfolio attracting interest from strong, respected, residential partners,” said Edward Sonshine, chief executive officer of RioCan, in a release.

“RioCan saw the potential in these lands, which were either vacant or producing minimal income. Through obtaining zoning approvals for intensification, we drive net asset value growth, create incremental, sustainable income streams and complement the adjacent retail space.

“Because the developments will take place on discrete portions of existing sites, we are able to move forward with minimal disruption to the income currently generated from the RioCan-owned shopping centres adjacent to the development area.”

Killam Ottawa partnership

Killam paid $3.7 million for its acquisition at Elmvale Acres, based on $45 per buildable square foot of expected future density.

RioCan acquired the Elmvale Acres shopping centre, located at St. Laurent and Smyth Roads in East Ottawa, in 2004. The 146,699-square-foot, open-air retail site is anchored by a Loblaws store, Rexall pharmacy, The Beer Store, LCBO and an RBC branch.

In July 2017, RioCan received zoning approval for mixed-use development including approximately 450,000 square feet of residential net leasable area, or 570 residential rental units.

The project will also include approximately 123,000 square feet of at-grade retail space.

The development is to be completed in five phases. This transaction relates to the first phase of the project which is expected to close in mid-2020 once severance of the land is obtained.

This first phase consists of 168 residential rental units and approximately 11,000 square feet of at-grade retail. Demolition and site servicing commenced in September.

Killam’s other RioCan projects

Killam and RioCan are already partners at two other sites.

Killam recently purchased a 50 per cent interest in Charlottetown Mall on Prince Edward Island where there is potential to construct up to 300 new residential units.

Killam also owns a 50 per cent interest in Frontier in Ottawa, one of RioCan Living’s first residential rental projects. Frontier is adjacent to the new Blair LRT station and RioCan’s Gloucester Silver City Shopping Centre.

RioCan and Killam will build up to four residential towers and 840 units on the Frontier site. Leasing of the 228 units in Phase 1 started in December, with 85 per cent of the apartments leased at an average monthly rent of $2.49 per square foot.

Construction has commenced on the 209-unit second phase, with occupancy expected in 2021.

Boardwalk Mississauga partnership

Boardwalk’s partnership involves a 50 per cent interest in vacant land at Sandalwood Square for $80 per buildable square foot, or $14.9 million. The open-air, 96,571-square-foot Sandalwood Square shopping centre is just 100 meters from the future Hurontario – Bristol LRT station.

It is anchored by a Value Village and The Beer Store.

RioCan is seeking rezoning to construct a 25-storey mixed-use building on the site, which will include 470 residential rental units and approximately 12,000 square feet of retail. Zoning approval is anticipated in early 2020 and further intensification is in RioCan’s plans.

Boardwalk and RioCan Living are also already partners in the Brio residential rental development in Calgary. This 163-unit tower is at RioCan’s Brentwood Village Shopping Centre, immediately adjacent to the Brentwood LRT station. It is expected to be completed in 2020.

Both partnerships allow for cost-sharing, RioCan states in the release, “thereby mitigating risks and at the same time bring(ing) a wealth of local residential rental management expertise.”

About RioCan Living

RioCan’s development pipeline of major market mixed-use assets as of June 30, 2019 is estimated at 27.2 million square feet, 13.1 million square feet of which is already zoned for mixed-use developments.

RioCan currently has 2,700 residential units under construction (at 100 per cent share), with an additional 2,100 units expected to be underway by 2021.

About RioCan

RioCan is one of Canada’s largest real estate investment trusts with a total enterprise value of approximately $14.3 billion as of June 30. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties in high-density transit-oriented areas.

As of June 30, RioCan’s portfolio consisted of 230 properties with an aggregate net leaseable area of approximately 39.1 million square feet, including residential rental and 13 development properties.

RELATED ARTICLES:

* Apartment investment is paying off for REITs

* RioCan leverages big Ottawa retail redevelopment pipeline

* Ottawa’s Frontier a poster-child for transit-oriented development

* Riocan, Boardwalk JV on Calgary Brio apartment project

 


Don is a veteran editor and journalist with three decades of experience in print and online news, including 20 years at the Ottawa Sun. Most recently, he was the Sun’s…

Read more

Don is a veteran editor and journalist with three decades of experience in print and online news, including 20 years at the Ottawa Sun. Most recently, he was the Sun’s…

Read more





Industry Events