SmartCentres Doubles Ownership in SmartVMC City Centre, Becomes Largest Landowner in the Vaughan Metropolitan Centre. SmartLiving Set to Grow.

Globalnewswire.com
Dec. 1, 2021

SmartCentres Real Estate Investment Trust (“SmartCentres” or the “REIT”) (TSX:SRU.UN), announces a $513 million strategic acquisition of a two-thirds interest in 53 acres (“Acquired Lands”), in ‘SmartVMC’, the 100+ acre master-planned City Centre in the Vaughan Metropolitan Centre. This more than doubles SmartCentres’ interest in SmartVMC, uniting ownership across the property and making SmartCentres the largest landowner in Vaughan’s dynamic TTC subway-connected Downtown.

“These 53 acres represent the most strategic property in the country for SmartCentres REIT,” said Mitchell Goldhar, Executive Chairman and CEO of SmartCentres. “With 45,000 people expected to ultimately call SmartVMC home, it is the jewel in the crown of SmartCentres’ portfolio.”

The Acquired Lands have in-place Permissions for multi-residential, condominium, seniors’ residences, office, retail, recreational, entertainment, and other uses, aligned with the REIT’s transformation strategy. Mr. Goldhar’s Penguin Group of Companies (“Penguin”) owns the remaining 33.33% of Acquired Lands, therefore extending the successful SmartCentres/Penguin partnership to now own the entire 105-acre SmartVMC City Centre, on which 21 million square feet is envisioned. SmartLiving, SmartCentres’ wholly owned in-house residential development platform, is poised to grow exponentially with this acquisition.

“This is truly a unique situation. It is not every day a company can be involved in building an entire downtown,” said Mr. Goldhar. “SmartVMC is at the confluence of $3.5 billion in public transportation infrastructure, including the TTC’s new Vaughan Metropolitan Centre subway station, connecting the site directly to Downtown Toronto. While it may be difficult to imagine now, in time this will reveal itself as a new benchmark for modern living in our city and beyond.”

Approximately 11 acres of the Acquired Lands are currently occupied by various retailers, including a 146,000 square foot Lowe’s Home Improvement store and several quick service restaurants, providing strong holding income.

Merging these two parcels of land under common ownership enables the unleashing of creativity and maximizing of synergies, such as environmental sustainability, open space connectivity, renewable energy, and recycling management. Combined with its existing holdings in SmartVMC, this strategic investment will deliver growth to the REIT for years to come.

Transaction Highlights

• One of a kind large, high-quality entitled mixed-use development land at the confluence of Hwy 400, Hwy 407, and Hwy 7, Vaughan Metropolitan Centre University line TTC Subway Station, VIVA Bus Terminal and York Region Bus Terminal.
• Located in one of the fastest growing communities in Canada.
• Contributes to the demand for housing.
• Highly unique ownership of a majority of a 100+ acre City Centre.
• Significant NAV creation through multi-residential and other development for years to come; and
• Partial funding from units to be issued at $34.50; a 15.7% premium over most recent closing price of SmartCentres units.
• Closing expected to take place prior to December 31, 2021.

 

Funding

SmartCentres intends to fund the acquisition through:

• The issuance of approximately $200 million in subsidiary SmartCentres REIT Limited Partnership Units, to be issued at $34.50 per unit, and exchangeable into SmartCentres REIT Units on a one-for-one basis (subject to TSX approval), and
• Approximately $313 million from debt facilities and cash on hand.