Allied Properties REIT and RioCan REIT announced that King Portland Centre, which is currently under construction in Toronto, will include a rental property along with office and retail components.
The overall development site for King Portland Centre includes 79,975 square feet of land with frontage on King Street West, Portland Street and Adelaide Street West and is comprised of a restored heritage structure, 602-604 King West (the “Rental Property”), an adjacent property extending from King West through to Adelaide West (the “Development Property”) and a heritage structure under restoration, 642 King West (the “Ancillary Property”).
The Rental Property component of King Portland Centre is substantially leased and is expected to remain so through the development process. The Ancillary Property is undergoing restoration and is scheduled for completion in early 2018.
Allied and RioCan are building a new structure on the Development Property that will be integrated with the Rental Property and the Ancillary Property. The new structure will be comprised of 256,173 square feet of office GLA and 13,035 square feet of retail GLA fronting on King West and approximately 116 rental residential units fronting on Adelaide West.
The office and retail components of King Portland Centre have been designed to a LEED CS Platinum standard and will include best-in-class operational, environmental, life-safety and health and wellness systems.
Each of Allied and RioCan owns an undivided 50 per cent interest in the Rental Property, the Development Property and the Ancillary Property. On completion of the new component of King Portland Centre, which is scheduled for early 2019, Allied will manage the office component and RioCan will manage the retail and residential components.
Indigo Lease Transaction
Indigo’s head office currently occupies 65,027 square feet over seven floors at Allied’s 468 King West, representing all the GLA in the building, including the ground and basement floors, which can more valuably be put to retail use.
Recognizing the need to expand the size of its head office and to achieve efficiencies possible on larger floor plates, Indigo decided not to renew its lease at 468 King West, which currently expires on June 30, 2018, and will be extended as necessary to accommodate the move to King Portland Centre. On expiry of Indigo’s lease at 468 King West, Allied will upgrade the property and reposition the ground and basement floors for retail use with a view to boosting the NOI from the property in a material way.
Indigo has agreed to lease approximately 78,810 square feet of office GLA over four floors at King Portland Centre for a term of 15 years and six months commencing on July 1, 2018, subject to unavoidable delay. The space will be used for Indigo’s head office and will include a portion of the second floor and all of the third, fourth and fifth floors.
“Indigo is one of our pioneering tenants at King & Spadina, having taken occupancy at 468 King West in April of 1999 and grown continuously in the area since that time,” said Michael Emory, President & CEO of Allied. “We value the relationship immensely and are delighted that we can accommodate Indigo’s workspace needs in the area as they continue to evolve.”
“The downtown west area of Toronto is an exciting and vibrant part of Toronto that RioCan and Allied long ago identified as an area where our tenants want to be,” said Edward Sonshine, CEO of RioCan. “Our success at Shoppes on Queen West, located a few blocks north on Portland Avenue, is a prime example of what can be accomplished in urban retail, and the King Portland Centre enhances our urban footprint by extending our presence to include office and rental residential. The substantial progress that Allied has made leasing the office component of this high profile mixed use development demonstrates the success of this project and our shared vision to shape the future of the downtown west market.”