Commercial real estate giant RioCan, the dominant player in the London market, is preparing to put its 11 retail plazas in London up for sale, along with others in Southwestern Ontario, as it bails out of most “secondary” markets.

Based in Toronto, RioCan Canada’s real estate investment trust (REIT) is the largest Canadian company in the sector with almost 300 properties across the country.

The company said this week it will sell off 100 properties in smaller centres so it can concentrate on Canada’s largest cities, including Toronto, Vancouver, Montreal, Ottawa, Calgary and Edmonton.

The sales will be completed over thew next two to three years and are expected to generate $1.5 billion in revenue, which will be plowed back into investments into the six major markets as well as residential projects, the company said.

Almost every major suburban intersection in London has a RioCan plaza, making London potentially the hardest-hit by the sales since it has more RioCan properties than any other secondary market in the company’s portfolio.

RioCan also has a single property in each of Goderich and Stratford.

Although the company hasn’t released a list of properties up for sale, local commercial realtors expect all the London properties will be up for sale.

RioCan spokesperson Christian Green said the sell-off is part of longer strategy to retrench in major markets.

“Major markets have the growth profile that we are looking for,” he said.

Green said RioCan is trying to diversify by investing in “mixed-use” project that include residential units as well as retail.

Riocan has retail properties in many smaller communities, including Stratford and Goderich, but almost 75 per cent of its revenue comes from the six major markets. That will rise to 90 per cent after the sale.

London commercial realtor Richard Gleed said the shift from bricks-and-mortar retailers to online shopping has made leasing more difficult and is prompting RioCan to retrench in the largest, most profitable markets.

“The growth is in the bigger markets and that doesn’t bode well for London. When any big REIT is offloading assets, you say, ‘Why? Are they losing faith in the market?”

Gleed said the upside is that the departure of RioCan from London will open up the market for smaller players, including local investors.

Gleed said he expects all of the RioCan properties in London will be on the market.

Peter Whatmore, vice-president of commercial realty services company CBRE, sounded more optimistic, saying the sale of RioCan assets in London is part of a normal business consolidation for large corporations and offers a “great opportunity” for other investors.

Whatmore said he expects the RioCan properties could be sold off fairly quickly.

“I think the list of prospective buyers is fairly deep from pension funds, to private investors to regional groups. There is still lots of demand for retail real estate.” he said.

hdaniszewski@postmedia.com

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RioCan properties in London

Commissioners Court Plaza: Commissioners and Wonderland roads

Hamilton Highbury Plaza: Hamilton Road at Highbury Avenue

Highbury Shopping Plaza: Highbury Avenue at Huron Street

London Plaza: Wellington Road south of Highway 401

Riocan Centre London North: Fanshawe Park Road at North Centre Road

Oakridge Centre: Hyde Park Road and Oxford Street West

RioCan Centre London South: Wellington and Commissioners roads

Sherwood Forest Mall: Wonderland Road at Gainsborough Road

Adelaide Centre: Adelaide Street at Cheapside Street

Wharncliffe Centre: Wharncliffe Road at Base Line Road

Huron Heights: Huron Street and Highbury Avenue