RioCan Real Estate Investment Trust (TSX:REI.UN) and U.S. mall owner Tanger Outlet Centers Inc. have signed a deal to establish their first location under a joint venture announced earlier this year.
RioCan and the North Carolina-based retailer have agreed to buy the Cookstown Outlet Mall in southern Ontario for about $62 million and turn it into the first Tanger shopping centre in Canada.
The pair will develop the mall, about 50 kilometres north of Toronto in the town of Innisfil, Ont., into the first full-scale Tanger Outlet Center operation in Canada.
The partners also said they have struck a deal to acquire 50 acres of land (20 hectares) in Kanata, an Ottawa community, and develop it into a Tanger Outlet Center.
“We are very pleased to be able to jump start our co-ownership with Tanger and bring our collective expertise to a very well established, well located property and make it a key destination outlet shopping centre for Toronto and the surrounding area,” said Edward Sonshine, president and CEO of RioCan.
“Our site in Ottawa, represents an exciting opportunity to expand our co-ownership platform beyond Toronto, into other key Canadian retail markets.”
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Steven Tanger, president and CEO of the North Carolina-based mall developer, said the Cookstown deal “accelerates our plans with RioCan for outlet centre development in Canada.”
“The addition of the site in the Ottawa market puts us well on the way to the establishment of a Canadian outlet shopping platform,” he added.
Tanger, based in Greensboro, N.C., owns or has stakes in 38 upscale outlet shopping malls in 25 U.S. states coast to coast.
Tanger and RioCan, Canada’s largest retail landlord, signed a deal earlier this year to develop 10 to 15 outlet shopping centres across Canada in the next five to seven years.
Under the agreement, Tanger will be in charge of leasing and marketing services, while RioCan will handle property management.
The two will each own a 50 per cent stake in the properties, which will be likely be located in suburban areas near Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver, Sonshine said.
Tanger outlet centres have a wide variety of major tenants, including luxury leather goods retailer Coach, fashion retailer Polo Ralph Lauren and gourmet food store Harry and David.
Outlet malls are big business, with shoppers willing to drive hundreds of kilometres to snap up designer goods at discount prices.