Crombie REIT will sell an 89 per cent non-managing interest in 15 retail properties across Canada to Oak Street Real Estate Capital (Oak Street) for $193 million.
Crombie will retain an 11 per cent ownership interest and will continue to manage and operate the properties. The transaction includes approximately 720,698 square feet of primarily free-standing grocery-anchored properties.
“This partial disposition is another example of our team’s solid execution of our strategy,” said Don Clow, President and CEO in the trust’s press release.
The 15-property transaction is scheduled to close in the fall of 2019.
“Priced in line with IFRS fair values, it provides important funding to facilitate significant progress towards completion of our first five major development projects, which are expected to be nicely accretive to Net Asset Value and AFFO. This transaction strengthens our balance sheet through debt reduction and enables pre-funding of our major development activities well into 2020, aligning with our long-term funding strategy.”
“These properties are an excellent addition to our portfolio, which is designed to create stable long-term cash flow backed by investment-grade rated corporations,” said Marc Zahr, chief executive officer and managing partner of Oak Street. “Crombie’s industry leadership and long-term commitment to invest in these locations fits perfectly with our income-based strategy. We are very pleased to continue and grow our partnership with Crombie.”
The portfolio is 100 per cent occupied and is subject to long term leases with Sobeys.