The Kindersley Mall should soon have new owners
Kenneth Brown
of The Clarion
The property management company looking to acquire the Kindersley Mall plans to find new tenants, including a food retailer.
The Clarion reported last week that Strathallen Acquisitions Inc., a subsidiary of Strathallen Capital Corp., has entered into an agreement of purchase and sale with a subsidiary of OneREIT to acquire 44 retail properties across Canada for a total of $703.5 million.
The Kindersley Mall is one of the 44 properties included in the transaction. OneREIT, the owner and property manager for the mall, aims to sell an additional 12 properties to SmartReit as part of the transaction.
According to press releases, the 44 properties in the Strathallen transaction have a total of 4.6 million square feet of retail space and the primary uses of the 44 properties include grocery stores, drug stores and services. There are other costs and considerations included in the transaction.
OneREIT, a publicly-traded real estate investment trust based in Vaughn, Ont., is holding a special meeting of its unit-holders on Sept. 25 where unit-holders will vote on the transaction.
The board of trustees for OneREIT has unanimously recommended that unit-holders vote in favour of the transaction.
According to Strathallen, the acquisition would be funded by Strathallen Retail Property Fund IV, and an institutional investor. Strathallen is based in Toronto.
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Brian Spence
Brian Spence, a director and chairman of Strathallen, said the company is also an asset manager for several of the larger pension funds across Canada. He said the company buys marginal properties where it sees new opportunities.
“Buying retail properties in secondary and tertiary markets is what we do,” he said. The company looks for properties facing challenges to buy, rezone, re-merchandise and re-develop to create value for clients. “That’s out expertise.”
Strathallen officials will await the result of the OneREIT unit-holder meeting in September, but the company is getting prepared to take over after receiving the approvals. Spence said the transaction is firm but the company still has a lot of work to do before it takes over the property portfolio.
The company couldn’t talk to existing employees or mortgagees at the properties until the transaction was made public, so those discussions are now taking place, he said. The company must complete the task before the transaction closes.
According to Spence, the company’s property management people are travelling across the country to visit the locations to conduct interviews with existing employees. He said decisions must be made regarding the future of employees and the future of the properties.
Strathallen has plans for its new properties. They will be operated, enhanced or sold depending on whether company officials believe they add value, he said. Not all of the properties will be kept.
Spence said one of the OneREIT properties is an IGA Grocery Store in Mont Tremblant, Que., and the plan is to sell the property because there’s not much the company could do with it. The OneREIT portfolio included a specific group of properties, so Strathallen had to take them all, he explained.
The company’s leasing people are working on the other properties and the Kindersley Mall is one of those properties, Spence said. The leasing officials are looking for new tenants and considering changes to the properties.
Company officials have done their due diligence and they knew the Extra Foods grocery store was closing, but the Kindersley Home Hardware Building Centre closure came as a bit of a surprise, the chairman said. The hope is to fill the mall’s two largest vacancies.
“We would hope that we could replace the food store there,” Spence said, recognizing that the size of the Kindersley market will be a consideration. “We’ve got some other ideas for the Home Hardware, so we’re already on it.”
Strathallen has been purchasing property for 15 years and its people are located from coast to coast, he said. He added company officials look forward to completing the transaction and the acquisition will “basically double the size of our assets under management.” The company also has plans to expand its workforce.
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© Kindersley Clarion
