SmartCentres REIT and Penguin Group of Cos. formed a joint venture for a new, relocated Walmart store and a residential project on their jointly owned lands in the Vaughan Metropolitan Centre in Ontario.

SmartCentres said 10.76 acres of the new 15.48-acre joint venture site will be used for the development of a new, 140,000-square-foot Walmart prototype store, which will be a relocation of the existing Walmart store sitting on a 15.7-acre land parcel. The lease for the old store provided Walmart with a leasehold interest in the 15.7 acres for up to 78 more years, which will be terminated, allowing for new developments.

The site in the new joint venture will subsequently be used over the next several years to develop an additional 1.7 million square feet of residential condominium and/or purpose-built residential rental density on that portion of the site not subject to the lease for the new Walmart store, which is expected to open in August 2020. It will have an initial lease term of 22 years, with options to extend for a further 55 years.

As part of the joint venture, the real estate investment trust will acquire a 50% stake in the joint venture site for C$109.2 million in cash from Penguin.