Fredericton’s Plaza Retail REIT Is Reinventing Mall Culture Across Canada
As one of the few publicly traded companies in New Brunswick, Plaza Retail REIT (Real Estate Investment Trust) has been going strong since the 1990s.
The business was founded then by Earl Brewer and Michael Zakuta and has continued to be the same business: a mall owner, developer and manager of retail properties. The company also specializes in stand-alone retail outlets like restaurants and Shoppers Drug Marts.
While Plaza is headquartered in Fredericton, they have significant offices in other provinces supporting their nearly 300 properties across eight provinces.
“We’re very proud to be headquartered in Atlantic Canada,” Plaza executive vice-president and chief operating officer James Petrie says. “We think it does give us a competitive advantage. For better or worse, a lot of the national landlords that in our area, publicly traded REITs, they tend to not be as invested in Atlantic Canada.”
“It’s allowed us to build shopping centres throughout Atlantic Canada where we think we have a competitive advantage, just because we’re here every day. We’re travelling these streets, we know the cities and the towns so well.”
Petrie says they are using their experience of operating in a smaller city like Fredericton to operate in similar markets in Ontario. He says this is where much of their focus is now: expanding their geography into Ontario.
“There are a lot of Fredericton-sized markets in Ontario, hundreds of them. If we can carry on what we do here into those markets, there are a lot of exciting things that can happen.”
Petrie says another reason the company has remained headquartered in Atlantic Canada is because of the level of talent found here. He says the staff they’ve built in Fredericton have allowed the company to compete nationally.
“I think our culture is believing in investing in people,” Petrie says. “We’ve always hit above our weight because we’ve invested in people at an early stage when we probably couldn’t afford it but we did that on the idea that we had future growth and as we grew, it was important to have the right people in place.”
Now publicly traded, the company was originally traded on the TSX Venture Exchange but graduated to the full TSX a few years ago.
Petrie says being publicly traded has affected nearly every aspect of the way the company runs.
“It’s really allowed us access to capital that we wouldn’t have otherwise had. It gave us a certain credibility because as a public company, you are heavily regulated,” he says.
“Because you’re publicly traded, you have a lot of responsibilities and regulations to adhere to. As a general rule, the market tends to prefer to land or invest in public entities because there are those assurances.”
“I think public companies do a good job of keeping very clean and I think investors feel comfort in that.”
Petrie says as a publicly traded company, Plaza has more disclosure requirements than they would as a fully private company. He says this disclosure requirement impacts how they do business as well as their staffing.
Plaza Retail REIT’s current projects include the simplification of five different shopping centres across Canada. Petrie says so far, the retailers in these simplified shopping centres, normally enclosed malls that have been turned into strips, are doing much better.
Petrie says traditional enclosed shopping centres are becoming a thing of the past and the company is not seeing this as a loss, but rather taking advantage of the opportunity to transform the centres into something new and profitable.
“That model doesn’t work as well as it used to, especially in medium and smaller towns,” Petrie says. “A lot of those small malls are starting to empty out but we use that as an opportunity to go into these smaller markets across Canada and simplify those properties … Almost a de-mall situation where we turn an enclosed centre into a strip. That’s been a great success for us.”
Petrie believes this is because the population today wants the convenience of being able to drive up, grab what they need and get out and Plaza is well poised to give people the shopping experience they’re looking for.
“Plaza has always thought differently than a Bay Street company. That’s what made us feel different. That makes us entrepreneurial,” he says.
“I think [our employees] are the least lazy people I’ve come across and I’ve worked in lots of other cities and other companies, other law firms and I think Maritimers work extremely hard. I think they go all out. We have to work a little harder than others maybe to prove ourselves.”