Strip malls sell for $85M

Vancouver real estate investors are bullish on the Okanagan.

Peterson Group and Premise Properties have ponied up a combined $85 million to purchase the Dilworth Shopping Centre in Kelowna and Vernon Square retail development.

RioCan Real Estate Investment Trust sold the shopping centres as part of a sell-off of 100 properties in smaller and secondary markets across the country.

Dilworth Centre sits on 14 acres along Highway 97, just past Orchard Park. Among the higher-profile tenants are Safeway, Jysk, Staples, Boston Pizza and TD Bank.

Vernon Square is also situated along Highway 97, just below Kal Tire Place. It includes London Drugs, Prospera Credit Union and White Spot. A Safeway store in the shopping centre is owned separately and is not part of the sale.

“The assets just fit well into who we are, and what our strategy has always been, which is looking for value and opportunities,” said Darren Wong, Peterson Group’s director of investments.

“We were able to purchase the properties and get value,” said Justin Pollard, Premise Properties’ vice-president.

In Vancouver, you are typically overpaying for development ... which makes the returns really skinny and the costs really high.”

The Kelowna property is also positioned for future redevelopment into a mixed-use site, Pollard said.

“That was another one of the solid reasons why we bought the property, it’s 14 acres,” he said. “There is a lot of opportunity there, we feel, to have a good mix.”

He said Vernon Square would likely remain strictly a shopping centre for the foreseeable future.

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