SmartCentres plans to start or deliver roughly three shopping-centre projects annually as it directs more of its near-term growth toward retail and pushes back highrise development on about half a dozen properties.

Chief executive Mitchell Goldhar said the annual pace is a reasonable planning estimate and could prove conservative.

“I think that would be a fair number to use as a placeholder for now, and maybe arguably on the conservative side,” Goldhar told analysts during the Vaughan-based real estate investment trust’s second-quarter conference call Friday.

The change comes as SmartCentres recorded a $196.2-million fair-value loss on its investment-property portfolio, driven largely by revised timelines for potential highrise development on about half a dozen properties.

Goldhar said the company no longer considers development at those sites imminent and determined that reducing their carrying values was prudent.

SmartCentres is not abandoning residential construction. Work continues on the 340-unit ArtWalk condominium at Vaughan Metropolitan Centre, where approximately 93 per cent of the units have been pre-sold. Construction has also started on an adjacent 65-unit rental building.

However, management views anchor-led retail development as a faster and more predictable source of growth. SmartCentres intends to begin each project with an anchor tenant and a substantial portion of the space preleased.

Goldhar said a shopping centre can begin producing rent after roughly one year of construction, providing income for the following 20 to 30 years.

“That’s really the ultimate driver of significant, material growth,” he said.

The strategy comes as another major Canadian shopping-centre owner refocuses capital on retail. As Connect CRE reported Thursday, RioCan is nearing completion of a $1.3-billion residential exit designed to simplify its business and redirect capital toward its core retail portfolio.

SmartCentres’ retail properties are also benefiting from the replacement of Toys “R” Us. Four of the six former locations have been leased at higher rents, while the company has interest in the remaining two.

Chief portfolio and asset management officer Rudy Gobin said Toys “R” Us typically drew customers two or three times annually, compared with weekly visits generated by food, pharmacy and dollar-store tenants.

The additional traffic should support sales at neighbouring stores and eventually produce higher renewal rents throughout the shopping centres, he said.

Meanwhile, SmartCentres expects to begin construction on a nearly 100,000-square-foot expansion of Toronto Premium Outlets during the fourth quarter. The addition is approximately 50 per cent leased, with rents in the triple digits and existing tenants seeking larger stores.