Here's What's Happening With Sears at Oakville Place
Court approval has been granted regarding the future of two Sears Canada locations - one in Oakville - and the Leighland Ave. store may be replaced with a high-end U.S. retail giant.
RioCan Real Estate entered into agreements with Sears Canada Inc. on Oct. 4 — and the deal still stands, RioCan CEO Ed Sonshine confirmed to inhalton.com on Oct. 12.
RioCan and its co-owner Hudson’s Bay Company (HBC) have secured a surrender agreement with Sears for its location at Oakville Place for a fee of $4 million (at 100 per cent).
The property is co-owned through RioCan's joint venture with HBC on a 50-50 basis.
RioCan has the option for a 40,000 sq. ft. Saks OFF 5th store, which it’s considering, among other alternatives, in the 104,000 sq. ft. space formerly leased by Sears.
(That’s the discount or outlet division of Saks Fifth Avenue).
The partners are also in discussions with other national tenants to take the remainder of the space.
In connection with the lease surrender, this means the partners will now be free to pursue future intensification possibilities at the site since the agreement eliminates development restrictions, which were part of the Sears lease agreement.
“With few development locations available in Oakville, it represents a significant opportunity to create additional value on the site with the potential significant additional density,” reads a statement issued by RioCan.
The new leases, when completed, “will provide significantly more rental income than what was generated previously through the lease arrangement with Sears.”
In addition, “these new and exciting tenants will also serve to improve the appeal of RioCan Oakville Place and attract a wider range of shoppers.”
Keep in mind, Saks Fifth Avenue OFF 5TH is part of the HBC brand portfolio, acquired in Nov. 2013.
The retailer has roughly 120 stores plus its e-commerce division, saksoff5th.com; it offers a modern shopping experience of curated off-the-runway trends, leading the market as the premier luxury-value destination.
The first Saks Fifth Avenue outlet store was opened in Franklin Mills, Pennsylvania, in 1992 under the name Clearinghouse. The outlet division name was officially changed to OFF 5th in 1995.
The closest Saks OFF 5th location is in Halton Hills at Toronto Premium Outlets (owned by Simon), followed by Etobicoke at 1950 The Queensway (across from Sherway Gardens — behind Jack’s Astors. Saks Fifth Avenue is in the mall, owned by Cadillac Fairview), and Bramalea City Centre, owned by Morguard.
Over the past three years, Oakville Place has undergone an extensive $40 million renovation that includes a modernization of the interior common areas and exterior improvements at the centre; renovation of the Hudson Bay store which anchors the site; replacement of the parking deck; and the introduction of new retailers including Pusateri's Fine Foods, Pandora, and Sephora.
U.K.-based TopShop/TopShop Man also recently opened.
The other Sears location covered in the deal is at Garden City Shopping Centre in Winnipeg.
RioCan and its co-owner Bayfield Realty Advisors have entered into an agreement to purchase the freehold interest in the Sears location for a purchase price of $8 million (at 100 per cent).
The partners own the site on a 30-70 per cent basis.
RioCan provides property and asset management services for the Winnipeg mall, which is home to 85 retailers and includes major national tenants such as Canadian Tire, Winners, Dollarama, and Goodlife Fitness.
The centre is currently undergoing a $9 million renovation by the partners that will incorporate an expanded food court dining area, larger bathrooms and additional comfort seating within the mall as well as improvements to the energy efficiency of the centre.
The former Sears location is approximately 92,500 sq. ft. and by acquiring the site, the partners will secure control over the entirety of the site and the access points to the shopping centre.
In addition, it will simplify the ownership structure of the property should the partners seek redevelopment opportunities at the location.
RioCan is Canada's largest real estate investment trust with a total enterprise value of approximately $13.9 billion as of June 30.
Oakville Place is situated on a 29-acre site. The mall’s grand reopening celebration is taking place this weekend.