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Ivanhoé Cambridge Close to Selling Stake in Two Malls

Sources Say Real Estate Company Negotiating with Greystone for Fairview Mall and AIMCo for Richmond Centre
January 10, 2018
Pictured: Fairview Mall in Toronto.

Ivanhoé Cambridge is in the final stages of selling its 50% stake in two key regional malls, sources tell CoStar News.

The subsidiary of the Caisse de dépôt et placement du Québec is negotiating with Regina-based Greystone Management Investments for a half interest in Toronto's Fairview Mall, which continues to be 50% owned and managed by Cadillac Fairview Corp. The deal hasn’t closed so there is no guarantee it will get done, according to a source.

Ivanhoé hasn’t publicly disclosed it is selling an interest in any of its malls. The company would not comment on any potential transactions but sources indicate its 50% passive stakes in The Richmond Centre in suburban Vancouver and the Market Mall in Calgary, in addition to Fairview Mall, have been on the market for months. Greystone officials would not comment.

Sources indicate Ivanhoé is not close to a sale on the Market Mall but is near a deal for its stake in the Richmond Centre with the Alberta Investment Management Corp. or AIMCo. Officials with AIMCo, which has more than $95.7 billion under management and is responsible for 32 pension, endowment and government funds in Alberta, would not comment on any deal.

"AIMCo does not have any comment to share," an official replied via email, about its potential purchase of the Richmond Centre.

Even without its stake in the three malls, Ivanhoé Cambridge would remain one of the largest mall owners in Canada with interest in 26 properties.

In Fairview Mall, Ivanhoé would be exiting a mall that was named by the Retail Council of Canada as the 11th best in the country, in terms of sales per square foot at $956, for the 12 months ended June 30, 2017. The 861,096-square-foot mall was built in 1970 and renovated a decade ago.

The 785,899-square-foot Richmond Centre, which opened in 1965, finished 12th in the country in sales per square foot at $937, according to the Council, which had Market Mall at 17th with sales of $887 per square foot.

While the sales statistics seem to indicate slumping oil prices have not slowed Alberta malls sales in the energy-dependent province, buyers might still be wary of paying too much for the Market Mall stake, said one source.

"Vancouver, Toronto are markets where people want to be right now, not Calgary, so you might see disagreement on price," said an industry source.

Ross Moore, a senior vice president at Cresa, based in Vancouver, said 50% passive stakes have grown in popularity in the past 10-20 years. "It's basically, just give me the money and I get to keep the property management, and you get money deployed. It’s a win-win," he said.

Garry Marr, Toronto Market Reporter  CoStar Group   
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