Ivanhoé Cambridge continues retail investment spree

The real estate arm of Caisse de dépôt et placement du Québec has made a majority investment in a shopping centre in suburban São Paulo, shortly after buying out JV partner Commerz Real in the ownership of four Canadian malls.

Ivanhoé Cambridge continues to expand its footprint in the North American retail space by acquiring a majority interest in a Brazilian shopping centre, shortly after buying out its joint venture partner in the ownership of four Canadian malls. 

According to statements issued by the real estate arm of Caisse de dépôt et placement du Québec, Ivanhoé Cambridge has acquired a 73.2 percent stake in the development of the Golden Square Shopping Center in the São Paulo region from Squarestone Brasil. The firm also has bought out the 50 percent stake of its joint venture partner, German-based asset manager Commerz Real, in four Canadian shopping centres, thereby making Ivanhoé the properties’ sole owner.

Located in São Bernardo de Campo, a suburb of São Paulo, Golden Square will be developed over three floors and will occupy approximately 323,000 square feet. Agreements already have been reached with many retailers to reserve about half of the rental space, and the centre's opening is set for April 2013.

As part of the deal, Squarestone Brasil will remain a minority shareholder in the venture, although Ivanhoé will have the option to acquire the remaining portion of the shopping centre. Ancar Ivanhoe, its Brazilian subsidiary, will assume full management of Golden Square and be responsible for marketing the property. 

Claude Sirois, executive vice president of commercial investment and emerging markets at Ivanhoé, said in a statement: “We are pleased to enhance our competitive position in São Paulo. Golden Square offers a unique opportunity to acquire majority ownership in a dominant property.” The property is added to 11 other shopping centres that the firm owns in Brazil.

In addition to buying a majority stake in Golden Square, Ivanhoé Cambridge is set to begin the expansion of the Porto Velho shopping centre, which opened in 2008 and was developed entirely by Ancar Ivanhoe. These two projects represent an investment of C$132.8 million (€107.3 million, $133.2 million). 

The expansion of the Porto Velho shopping centre, which now has 145 shops, will be undertaken in two phases. The expansion will add nearly 148,000 square feet to its present area of 322,000 square feet and allow for the opening of seven department stores, a new food court and 543 new parking spaces. Opening of the centre's expanded space is expected in November 2013.

Just prior to that announcement, Ivanhoé Cambridge revealed that it had acquired Commerz Real’s 50 percent stake in Place Ste Foy in Quebec City, Mayfair Shopping Centre in Victoria, North Shore Galleries in Repentigny, Quebec, and Mic Mac Mall in Dartmouth, Nova Scotia.

“We are very pleased to increase our involvement with these quality retail assets,” said Daniel Fournier, chief executive officer of Ivanhoé Cambridge. “Our investment of C$508 million, which includes mortgage debt of C$138 million, will strengthen our portfolio of shopping centres across the country. Today's announcement is part of our strategy to increase our critical mass in certain target markets.”

Ivanhoé Cambridge owns 38 shopping centres in six provinces in Canada, 16 of which are in Quebec, six in British Columbia and one in Nova Scotia. “Our best returns often come from properties in which we are engaged for many years,” Fournier added. “Place Ste-Foy, North Shore Gallery, Mayfair Shopping Centre and Mic Mac Mall are key assets in their communities.”