Pen Centre sold: Montreal-based firm buys Niagara's largest shopping centre for $140 million

Hamilton Spectator

6 days ago

The Pen Centre has been sold — but Niagara shoppers have no reason to worry.
New owner, Montreal-based real estate firm
Leyad
, says the mall isn't going anywhere, and is confident about its future with plans to invest in its long-term success.
Which includes the potential for residential development down the line.
Montreal-based real estate firm Leyad purchased St. Catharines' Pen Centre for $140 million — taking over Niagara's largest shopping mall which includes more than 1.1 million square feet of retail space.
Leyad
announced it
s purchase of the St. Catharines' retail outlet for $140 million this week, taking over Niagara's largest shopping centre which includes more than 1.1 million square feet of retail space.
In a media release iss
ued Thursday, the privately held real estate investment and development firm announced it had acquired the 2.8 million square foot property, anchored by tenants including Loblaw Co., Walmart, Lululemon and Sephora.
While Leyad's portfolio in
cludes retail properties across Canada from Alberta to Manitoba, the Pen Centre is the company's first acquisition in Ontario.
In an interview with The Standard, Leyad chief executive officer Henry Zavriyev said unlike other retail centres who are struggling to stay open, the Pen Centre 'is very much here to stay,' with
more than eight million visitors passing through its doors each year.
Montreal-based real estate firm Leyad purchased St. Catharines Pen Centre for $140 million — taking over Niagara's largest shopping mall which includes more than 1.1 million square feet of retail space.
He added the mall
will remain a mall, '150,000 per cent.'
'We want to maintain
status quo and we want to slowly build on what there is consistently and improve the centre,' said Zavriyev.
'We see the centre he
re in 30 years. We think that with time, the types of retailers that are there will change — and are changing — but we are very bullish long-term.'
Last fall, the Ontario Pension Board, which previously owned the Pen Centre, opened the bidding process, with a number of Ontario institutional funds and investors holding discussions and submitting offers.
Leyad said the acquisition marks one of its most substantial retail real estate transactions in recent years.
Montreal-based real estate firm Leyad purchased St. Catharines' Pen Centre for $140 million — taking over Niagara's largest shopping mall which includes more than 1.1 million square feet of retail space.
Zavriyev said the Pen Centre is moving beyond its pandemic struggles, with new retailers opening in St. Catharines, including Kingpin, an arcade and bowling venue set to open on the second floor of the old Sears space in the coming months.
He believes that momentum will only continue over the next five years.
'Given that it's the dominant shopping destination, given that brick-and-mortar retail has been pretty resilient, we just have a very strong long-term belief in it,' he said.
'We will, hopefully, over the next few years, make it a place where you really have it all.'
Pen Centre leasing opportunities are already posted on Leyad's website, with current retail sales space going at about $650 per square foot. It includes opportunities for local businesses or larger franchises.
But the biggest piece is the former Hudson Bay store, which closed its doors in June.
The Pen Centre location is not included in the 28 Hudson Bay store leases purchased by Vancouver's Weihong Liu.
The Pen Centre in St. Catharines has been sold for $140 million.
'There will not be a big red diamond in front of the mall,' said Zavriyev.
As for how the space will be used, it's expected to be divided among three or four tenants, though discussions are still underway. Leyad said it's open to feedback and any deal, plus redevelopment, will likely take a few years to complete.
'Priority number one is to backfill that space and we have plenty of options to do so it's just picking the right complementary option to the retail that exists today,' he said.
In the release, Leyad called the Pen Centre a top retail destination with 'extraordinary long-term development potential,' including the chance to bring 'thousands of multi-residential units to this already-thriving hub.'
Montreal-based real estate firm Leyad purchased St. Catharines' Pen Centre for $140 million — taking over Niagara's largest shopping mall which includes more than 1.1 million square feet of retail space.
Zavriyev confirmed the company will explore ways to densify the property but said the process will be long and involve many stakeholders, including the City of St. Catharines.
'There is a lot of land and there is way to do it in a careful, smart way,' he said.
'Our priority is retail so there's no need to touch the existing property. There's land around it.'
In an email, St. Catharines senior manager planning services Scott Ritchie said the property is currently zoned major commercial and residential intensification is already permitted in the city's zoning bylaw in the form of apartment buildings above or around the mall.
'That said, council approvals may be required depending on the nature of any future development applications and whether any site-specific permissions or amendments to the zoning bylaw or city's official plan are required,' said Ritchie.
The Pen Centre dates back to 1957, when it first opened as the Niagara Peninsula Centre, a single-level, open-air strip mall anchored by Loblaws and home to 50 stores. In 1966, it expanded to include Simpsons-Sears and 80 new shops.
In 1975, the mall was fully enclosed.
In 2011, the Pen Centre got a fresh $13-million makeover, including a revamped food court. After Sears shuttered in 2018, the space was reworked into two larger storefronts alongside several smaller shops.
Greater Niagara Chamber of Commerce CEO Mishka Balsom called the sale a 'significant moment' for Niagara's economic development and urban renewal.
As the region's largest retail centre, the Pen Centre plays a 'vital role' in employment, consumer access and overall vitality of the local economy. For Balsom, Leyad's interest signals 'confidence in Niagara's long-term potential and offers an opportunity to re-imagine the site's future.'
'Seeing their commitment to in-person shopping, service-based businesses and integrating these areas into the community and seeing the vital role in how people live, how they work, how they connect … that's a really good sign,' said Balsom.
The sale also comes at a time when shopping centres are going through their own transformations into multi-use community hubs — blending retail, residential and cultural spaces, often integrating green spaces — as traditional malls evolve to stay relevant and serve broader needs.
'It demonstrates the traditional value of retail centres, but they can also have the ability to evolve to meet modern demands, while generating local employment, housing and a vibrancy,' she said.
'It brings people with different purposes together and I think (the Pen Centre) site has that opportunity.'
Balsom said reimagining the property could serve as a catalyst for further economic diversification and sustainable growth — especially with housing challenges — creating a 'future ready Niagara.'
'We really look forward to working with Leyad and municipal partners to ensure that any future redevelopment is thoughtful, inclusive and beneficial to the broader community,' she said.
In an email, St. Catharines Mayor Mat Siscoe said the Pen Centre remains a cornerstone of Niagara's social and commercial life, with a legacy spanning nearly 70 years.
'I look forward to working with the Leyad team as they enhance the Pen Centre through mixed-used redevelopment,' said Siscoe.
'This evolution positions the Pen Centre as more than a retail hub, but as a future-focused destination.'