Primaris REIT has agreed to acquire the CF Promenades St-Bruno mall in St. Bruno, Que., from Cadillac Fairview for $565 million in cash and equity.

The REIT said it has agreed to pay $320 million in cash and $160 million in series A units at a price of $21.40 per unit and $85 million of 6% exchangeable preferred units at a price equal to the issue price per unit, subject to customary adjustments.

St. Bruno is a suburb on Montreal’s South Shore. The debt-free enclosed mall includes a large space that formerly housed a Hudson’s Bay Company department store. All Bay stores were shuttered in June as the iconic, now-defunct chain began to wind down its debt-burdened business.

As part of the equity consideration, Primaris will issue about 11.5 million units to be provided to the vendor, based on market value at the time of issuance.

The proposed deal comes after Green Street News reported in June that Cadillac Fairview was exploring a sale of the property. 

“Promenades St-Bruno has all the characteristics which Primaris targets in acquisitions: Over $271 million in annual sales, $917 in sales per square foot, and 154 acres of land in Canada’s second-largest and growing market of Montreal, adjacent to mass transit,” said Patrick Sullivan, the REIT’s president and chief operating officer.

“There is significant NOI growth potential including leasing up vacant and temporarily tenanted space, and optimizing former department store space.”

The proposed deal is expected to close Friday. 

Cadillac Fairview continues to divest retail assets. Earlier this year, the company sold Lime Ridge Mall in Hamilton to Primaris for $416 million.

Pictured: CF Promenades St-Bruno mall in St. Bruno, Que.

Photo: Cadillac Fairview