Montreal-based developer purchases Cornerstone Shopping Centre property for $94 million

From left to right, Leyad Director of Commercial Properties Gregory Castiel, CEO Henry Zavriyev, and Director of Investments Eli Erdstein. -- Submitted photo.

Montreal-based real estate development firm Leyad has purchased the Cornerstone Shopping Centre property in Prince Albert for $94 million.

Leyad announced the purchase on Thursday. The property was previously owned by Choice Properties REIT.

“Obviously, there’s a lot of growth that’s going to be happening over the next few years,” Leyad CEO Henry Zavriyev said when asked what made them want to invest in Prince Albert. “There’s a lot of immigration. There’s investment in the hospital. We love that it has a diversified economy and is very representative of what a true Canadian city is (with) a very diverse population.

“We’re making other investments in Western Canada, and Prince Albert just really fit the criteria with what we were looking for,” he added. “Obviously, this shopping centre is the premier retail centre in Prince Albert.”

Zavriyev said the property came to their attention after they purchased a different Choice REIT property in New Brunswick. Leyad executives had never visited Prince Albert, but after spending a day in the city and researching the area, Zavriyev said they became convinced it was a good business opportunity.

“We love the properties there,” he said. “We love the tenants there. We like the aspect that it presents for future development. There’s still land that is part of the site where we could build property for incoming tenants. Everything about it is exactly the kind of property our firm looks for, and just Prince Albert in general has great prospects over the next five to 10 years.”

Cornerstone comprises 550,000 sq. ft. of buildings on 80 acres of land. Anchor tenants include Rona, Michaels, and Shoppers Drug Mart.

Zavriyev said they are making plans to find tenants for the district’s empty slots, but the discussions are still in the early stages. Any announcements won’t be made until 2025 at the earliest.

Statistics Canada reported that online shopping sales spiked in 2021 during the second COVID-19 wave. In February 2023, they released a report showing online retail sales were in decline, but still well above pre-COVID levels.

Despite the increase in online shopping due to COVID, Zavriyev is confident brick-and-mortar retail stores remain a solid investment.

“I’m definitely confident that people are going back to stores,” he said. “The data shows it. We’ve seen a return of foot traffic…. Obviously, e-commerce has an effect, but it’s not as black and white as to say that suddenly everyone is just only going to be shopping online.”

Zavriyev said necessity-based businesses like grocery stories or pharmacies aren’t going anywhere, and the rising number of immigrants arriving in Canada means there will continue to be a demand for in-person shopping.

“There’s a counter-balance to it in that there is immigration, and no one is building any retail (space) today across the country. If no one is developing any retail, even if the foot traffic were to go down (among) the city population, with population growth it counterbalances that.

“I definitely don’t think it (physical retail) is dead. I think it’s very much been resilient over the last seven to eight years. Every time doomsayers have been saying retail is going to die, it doesn’t. E-commerce has been around for a while. I think that everyone at this point is aware that you can order things on Amazon, and everyone is aware that you can go and order your mattress online and return it if you don’t like it, but they’re still going into stores.

“Our tenants are renewing across the country. They’re opining new locations, so we definitely feel it’s here to stay.”

Leyad touted the $94 million purchase as Saskatchewan’s largest real estate transaction in the past five years.

The Cornerstone purchase was one of two Leyad announced on Thursday. They also purchased Garden City Square in Winnipeg for roughly $32 million.