BGO is looking to acquire more Canadian retail properties after buying a large grocery-anchored shopping centre in Mississauga, Ont., says the company’s chief investment officer.

During the summer, the company purchased Rockwood Plaza for a reported $90 million through its Prime Canadian property fund. Chief Investment Officer Simon Holmes declined to confirm the price.

Holmes, also a BGO managing partner, told Connect that the company’s increased retail appetite has some “important nuances.”

“We are really looking for opportunities across all product types but this acquisition demonstrates our continued interest in necessity-based retail,” he said.

BGO regards necessity-based retail as a stable and income-generating asset class. Holmes noted that it has proven to be resilient even through the growth of online shopping and impact of the COVID-19 pandemic.

“These types of retail centers continue to attract steady consumer spending and maintain tenant demand,” said Holmes.

Rockwood Plaza spans more than 300,000 square feet across 23.7 acres. The property is currently 95% leased and benefits from Highways 401, 403, 427 and the QEW. The site is also in proximity to the Dixie GO station and Mississauga Transitway.

Rockwood is anchored by a Food Basics outlet, while the property’s other tenants include national retailers Winners, HomeSense, Shoppers Drug Mart, Dollarama and three major banks.

“This was a rare acquisition opportunity as assets like this do not often come to market,” said Holmes. “BGO had capital available and conviction to act at a time when many investors are still on the sidelines.”

The property is surrounded by a large residential population, offering long-term potential for densification or redevelopment, said Holmes. But BGO plans to maintain the asset strictly as a retail centre in the near and intermediate terms, with redevelopment 10 or more years away.

In the meantime, BGO is planning a capital-expenditure program for the mall involving mainly cosmetic and modernization upgrades.

“These types of improvements are really intended to enhance the appeal of the centre to both the tenants and consumers,” said Holmes. “Specific goals include enhancing the appeal of the centre and refreshing the property’s look, boosting its presence, and, again, filling some of those existing vacancies.”

As far as acquiring other properties, Holmes stressed that retail is not BGO’s sole focus as it looks to acquire more assets through the Prime Canadian fund.

“The fund is diversified and also invests in multi-family, office, and industrial assets, and it has capital to deploy, so we are definitely looking at other high quality and well-located properties that are accretive from a yield perspective,” he said.

Overall, BGO aims to be “as active as possible” acquiring high-quality properties at prices below replacement cost, he added.

Pictured: Rockwood Plaza shopping centre in Mississauga, Ont.

Photo: Courtesy of BGO