APM sells interest in Malls

The APM Group has sold its interests in four P.E.I. shopping centres to Plazacorp Retail Properties Ltd., a publicly held company trading on the Canadian Venture Exchange. Details of the sale, which involves the Belvedere Plaza, University Plaza, the Spring Park Plaza in Charlottetown and the Granville Street Plaza in Summerside, were announced Friday by Tim Banks, president of the APM Group.

Tim Banks said APM was trading its investment for shares of Plazacorp, making APM a substantial shareholder in the publicly-traded company. He said no jobs will be lost as a result of the sale and all APM employees working for the shopping centres will be transferred to Plazacorp. "This is a good marriage for APM and will allow APM to focus our energy on new development opportunities throughout Atlantic Canada while continuing to retain our investment without the day-to-day duties of retail mall operations," Tim Banks said.

Earl Brewer, president and chief executive officer of Plazacorp, was equally pleased with this development. "Tim and I have partnered on many real estate deals in the past and I'm happy that Tim has, through this sale, increased his initial investment in Plazacorp to a larger stake," Brewer said. "Plazacorp is encouraged by APM's support."

Plazacorp will maintain a local presence in its P.E.I. operations, Brewer indicated. Rachel Hope, shopping centre manager for a large regional shopping centre developer, has returned to P.E.I. to manage these four shopping centres for Plazacorp. For the time being she will work from APM's offices in Stratford but will report directly to Plazacorp's head office in Fredericton.

Plazacorp Retail Properties is a retail real estate developer that concentrates its activities in Atlantic Canada and Quebec. "Their acquisition and development of well-located shopping malls and strip plazas, together with their local knowledge and strong relationship with Canada's leading retailers, give them a distinct competitive advantage in creating a vibrant retail market," Banks said.

As to whether the sale of these malls to Plazacorp would result in new retail development, Banks said the potential was certainly there. "Let me just say that the sale to Plazacorp was a real positive step for these shopping malls. Plazacorp has a strong national retail presence. They attend all of the major trade shows relating to retail shopping centres. They set up booths and speak with potential tenants who look at their portfolio of retail properties.''

Banks said a major retailer looking to expand could look at their portfolios and obtain detailed information about potential locations. "Plazacorp could, for example, show retailers that they have four properties in P.E.I. that they might consider and provide them with comprehensive data about those locations. As a small operator in the retail sector, we weren't as well-connected to all of the bigger retail players.''

Banks said Plazacorp is also in the position of being able to suggest to tenants in their existing retail developments that they have other properties that these tenants might consider for purposes of expansion. He indicated that as a well-known player in the national retail market, Plazacorp's reputation would certainly carry a degree of influence.

Banks said the deal also works well for him as a developer. "It's a good investment for me as a developer. We're building a company here and there are times when other companies we might like to do business with see us as a direct competitor. If I wanted, for example, to approach McDonalds, they might point to the fact one of the malls I was involved in was home to Burger King. This deal frees APM of those kids of constraints. It eliminates potential conflicts of interest.''

The APM Group, a vertically integrated development company with several branches, is active throughout Canada. The company employs over 350 people and has combined revenue in excess of $80 million.