TORONTO, ONTARIO--(Marketwire - Oct. 31, 2012) - Calloway Real Estate Investment Trust (Calloway) (TSX:CWT.UN) today announced a 50/50 joint venture with SmartCentres to develop a vast tract of land (53 acres) within the Vaughan Metropolitan Centre (VMC). The Calloway VMC lands are strategically located adjacent to the terminus of the Spadina-York subway station in Vaughan and will be home to almost 6 million square feet of commercial, residential and retail development. Construction of the first building will begin in 2013.
"The Calloway lands will be the heart of the VMC," said Al Mawani, President & CEO of Calloway. "The VMC is the most exciting urban development in all of Canada. The Vaughan subway station together with the new regional bus terminal will connect the 905 to downtown Toronto and downtown Toronto to the 905. Also, the close proximity to the major roads and highway infrastructure, namely Highways 400, 407 and 7, makes our property a uniquely attractive location for corporate offices, retail and new residential development."
Calloway's VMC lands are currently "virtually undeveloped". To put this in context, upon completion, the Calloway JV lands will be similar in uses, densities, public transit and size to an area bounded by Bloor Street to Charles Street and Avenue Road to Jarvis Street in Toronto.
The first building to be constructed under the Calloway JV will be a Diamond & Schmitt Architects designed 300,000 square foot office tower with KPMG (one of Canada's largest international accounting firms) as the lead tenant. Construction is scheduled to begin in 2013 with completion in 2015. When complete, the 1200 people who will work in the KPMG Tower will have direct connections to both the subway station and the regional bus terminal by an underground pedestrian tunnel. Plans for the Calloway JV also include a major central park, civic square, and other associated uses supporting such urban city centres.
The Calloway VMC JV interest significantly expands the square footage of pipeline assets for the Trust by approximately 75% to almost 7 million square feet. Prior to this JV agreement, Calloway's interest was limited to the retail component on these lands.
This mixed use urban development also represents a significant new area of growth for Calloway. This diversification is in addition to Calloway's earlier announced venture with Premium Outlets in Toronto (Halton Hills) and Montreal (Mirabel). Construction of Toronto Premium Outlets, Canada's first true outlet centre, is scheduled to be complete by August 2013 and construction of Calloway's second outlet centre is expected to begin in Montreal in early 2013.
"We continue to invest our resources in feasible, profitable opportunities to maximize the returns," said Mawani. "When the Calloway VMC lands are fully built out, a significantly increasing portion of our cash flow will come from urban mixed use assets, and will open up even more development opportunities for Calloway in the future."
"This JV with Calloway will leverage the strengths of both companies and will be implemented by a team of urban planning and development professionals with extensive experience." said Mitchell Goldhar, President and owner of SmartCentres. "You cannot underestimate the impact of a subway on developable land."
The VMC joint venture agreements complete the previously disclosed outstanding negotiations related to floor cap rates on earnouts.
About the VMC
Located at the intersection of Highways 400 and 7 in the City of Vaughan, the VMC is an exciting and unparalleled emerging urban core within the northern Greater Toronto Area. This 400-acre planned downtown for the City of Vaughan will be home to 25,000 new residents and 11,000 new jobs in a variety of office and retail businesses. It will provide all the amenities of a vibrant city centre including direct access to multi-modal public transit including the Toronto subway system, while maintaining excellent access to the 400 series highway network within the GTA.
Calloway is one of Canada's largest real estate investment trusts with an enterprise value of approximately $6.2 billion. It owns and manages approximately 26 million square feet in 118 value-oriented retail centres having the strongest national and regional retailers, as well as strong neighbourhood merchants. Calloway's vision is to provide a value-oriented shopping experience to Canadian consumers. For more information on Calloway, visit www.callowayreit.com.
A Canadian company, SmartCentres has developed more than 250 shopping centres in communities big and small, and operates in every province. SmartCentres is a major contributor to SickKids, Bloorview Kids Rehab, CAMH and the Canadian Museum for Human Rights and many other worthy causes across Canada. For more information on SmartCentres, visit www.smartcentres.com.