Leyad has acquired The Bay Centre, a 420,000-square-foot mixed-use commercial property in the heart of downtown Victoria, from Manulife in an off-market deal for an undisclosed price.

“It requires a value add from a from a retail operator, and that's not core for them,” Leyad chief executive officer Henry Zavriyev told RENX about Manulife’s reason for selling.

“We live and breathe retail. That’s our core business. We have relationships across the country but we're also very grassroots and are reaching out to the locals and engaging with them.”

The complex opened in 1989 as the Victoria Eaton Centre in a partnership between Cadillac Fairview and the Eaton’s department store chain. When Eaton's went bankrupt in 1999, the Eaton's store was occupied first by Sears Canada and then The Bay, for which the mall was renamed.

Cadillac Fairview sold the complex to LaSalle Investment Management for $90 million in 2010 and LaSalle subsequently sold it to Manulife in 2015 for a price estimated to be in the $100- to $105-million range, according to Business In Vancouver.

The Bay Centre’s strong points

The Bay Centre is located at 1150 Douglas St. and occupies an entire city block bounded by Douglas, Government, Fort and View streets. The property is close to the harbour and offers direct exposure to the British Columbia capital’s strongest pedestrian corridors, tourism activity, office concentration and growing residential population.

“The centre has had some big momentum recently,” said Zavriyev. “The YMCA just moved into a brand new space and that’s driving tremendous foot traffic to the centre.

“This current tenant mix is very important because it appeals to not just the enormous amount of tourists to the port there, but also to the local clientele. We’re going to be positioning this property around necessity-based shopping, just like all the other properties in our portfolio.”

Leyad will be the property manager for The Bay Centre.

Former Bay store needs to be occupied

About half the space in The Bay Centre is taken up by the former Bay store that closed last June when Hudson’s Bay Company went bankrupt.

“We have a lot of things that we're thinking about doing with it,” said Zavriyev of the vacated space. “It will most likely be a combination of shopping and experiential tenants, such as museums, exhibits, entertainment, tech spaces, laser tag, pickleball and things like that.”

Aside from the space formerly occupied by The Bay, Zavriyev said the centre is about 98 per cent leased by 69 tenants. The largest tenants include Downtown Y, Winners, SportChek, Service Canada, Earls Kitchen + Bar and Ardene. 

The Bay Centre also includes a number of other restaurants, a dental office and other service providers.

Leyad’s continuing expansion

Montreal-based Leyad is a privately owned real estate investment and development firm that has a major focus on retail but also owns a large portfolio of multi-residential properties, seven industrial properties and two hotel properties across Canada.

Leyad has been actively acquiring shopping centres across Canada over the past few years and this year has already seen it add to its retail portfolio by purchasing:

• a 387,000-square-foot portfolio of seven single-tenant grocery stores leased to Loblaw Companies Ltd. in British Columbia, Manitoba, New Brunswick, Nova Scotia, Saskatchewan and the Yukon Territory;
• Winnipeg’s more than 900,000-square-foot, 160-store St. Vital Centre;
• the more than 200,000-square-foot, 37-store Lloyd Mall in Lloydminster, Alta.;
• and the 456,430-square-foot, 88-tenant Intercity Shopping Centre in Thunder Bay, Ont.

The company is seeking more retail acquisitions and expects to make another purchase announcement in a few months.