Cominar Hires Banks for Sale of Montreal’s Central Station

(Bloomberg) -- Cominar REIT has hired bankers to explore options -- including a possible sale -- for Montreal’s main railway hub as its strives to boost valuations, according to people familiar with the matter.

The Quebec City-based REIT hired advisers including Bank of Montreal to examine a potential sale of Central Station, according to the people, who asked not to be identified because the matter is private. Given the complexity of the mixed-used site, Cominar is exploring other options such as densification, the people said. Representatives for Cominar and BMO didn’t respond to requests for comment.

The historic Montreal subway and Via Rail station complex, located at 895 Rue de la Gauchetiere Ouest, serves an inter-city and commuter hub for about 50 million people a year and is located in the heart of Canada’s second-biggest city.

The station opened in 1943 and is the headquarters for Canadian National Railway Co., Canada’s largest railway. The complex around the rail hub consists of two office towers, retail and industrial space with more than 1.7 million square feet. Cominar, the largest commercial property owner in Quebec, has operated the station since 2012.

Cominar announced last week it set up a task force to explore options to “maximize the value” of the property -- its largest asset -- part of a strategic review of its portfolio to reduce leverage to about 50% of debt to assets.

The REIT has more than 300 assets in its portfolio including office, retail and industrial totaling 36 million square feet across the Montreal, Quebec City and Ottawa regions. Its shares have dropped by almost a third in the past five years, lowering its market value to C$2.5 billion ($1.9 billion).

The potential sale would be one of many transactions in Montreal this year. Allied Properties REIT bought a large office tower downtown from Dream Office REIT, while Bentall Kennedy LP purchased another key tower from two Canadian pension funds.

To contact the reporter on this story: Natalie Wong in Toronto at nwong133@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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