Calgary Mall to be Snapped Up for $120M

Canadian Real Estate Investment Trust has announced plans to shell out $120 million for Creekside Shopping Centre in Calgary, Alberta. The property is currently under construction and will ultimately feature approximately 370,000 square feet of space.

Situated on 41 acres in the Northwest area of Calgary, Creekside is already proving a valuable investment, as the tenant roster is already more than two-thirds full. About 290,000 square feet of space has been spoken for by such businesses as grocery store Co-Op, which will serve as an anchor, Shoppers Drug Mart and three banks. CREIT is purchasing the outdoor mall via a mezzanine loan program with Hopewell Development Corp. Hopewell, the developer and seller of the shopping center, is a merchant developer and constructs properties for the express purpose of selling them. The first part of the transaction, valued at $96.4 million, is on target to close by year's end.

Creekside is destined to be a cash cow, of sorts. Demand for retail across Calgary is very strong and rents are substantial The vacancy rate for retail properties in the Northwest region is 1.12 percent, according to October numbers culled by real estate services firm Colliers International, and rental rates range from $20 to $30 per square-foot at regional shopping centers.

"Significant population growth and increases in household incomes have resulted in significant rental rate increases across all asset classes," Adam Paul, CREIT vice president, investments, told CPN today.

"Calgary has been one of the strongest economic expansion markets in North America for the last couple of years," And certainly the expansion of oil is one of the primary drivers; there are oil sand patches in Northern Alberta."

Based in Toronto, CREIT presently has a portfolio of over 140 retail, office and industrial properties throughout Canada. Headquartered in Calgary, Hopewell Development is a division of the Hopewell Group of Companies, a diversified group of five companies serving the commercial and residential sectors, as well as logistics industries across Canada.

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source: commercialpropertynews.com