Sobeys Inc. (Sobey’s) and Empire Company Limited have entered into agreements with Crombie Real Estate Investment Trust (Crombie) in a transaction worth $418 million.
Sobeys will complete sale and leasebacks of 19 retail properties and 50 per cent interests in each of its three automated distribution centres, along with the sale of two parcels of development land for $360 million. Crombie will invest in renovations or expansions of 10 Sobeys retail locations already in Crombie’s portfolio.
In addition, Sobeys will enter into long-term fully net leases for each property, including the distribution centres and renovated and expanded stores, and provide environmental indemnities on the properties.
“This transaction is aligned with our strategic position of providing Crombie REIT preferred access to real estate assets while giving Sobeys access to capital to support our expansion as a leading national retailer,” said , president and chief executive officer of Sobeys.
The transaction will maintain Empire’s estimated 41.5 per cent equity accounted ownership interest in Crombie. Sobeys will receive the balance of approximately in cash which will be used for debt repayment.