Plazacorp has filed an IPO to raise between $60 and $75 million in equity to assist in funding its proposed Willowgrove development in Markham and Stouffville, just north of Toronto.

The prospectus, announced last week, would result in investors owning class-A and/or class-F units of the Willowgrove Residential Real Estate Development Trust (REDT). The price is set at $10 per unit.

Willowgrove REDT is currently owned by Plazacorp, and will offer investors indirect ownership of a majority equity interest in the project. Willowgrove is a development planned to comprise two residential subdivisions totalling 973 residences (467 townhomes and 209 single, detached homes, as well as 297 serviced lots) on a 213-acre tract of land straddling the two municipalities.

The IPO relates to 676 of those properties - the townhomes and detached homes.

The cost for full build-out of the multi-phased project is estimated at $804 million.

A Plazacorp spokesperson told RENX the company cannot comment on the offering due to the status of the IPO.

How the Willowgrove REDT will work

Once established, the REDT will begin developing the project, and once homes are being sold it will pay cash distributions to unitholders from the available cash flow.

Current owners of the development will retain a minority ownership interest in the project, but will not receive proceeds from the offering. Proceeds will be used for costs related to the offering itself, and to fund the development.

Osmington has made a pre-IPO investment of $5 million into the project. Total equity in the development, once the offering closes, is to total $110.9 million, Plazacorp states in its prospectus.

The site is located at 5500 19th Ave. in Markham, and 11859 and 12029 McCowan Rd. in Stouffville. In its prospectus, Plazacorp states the various blocks of lands are fully zoned and undergoing municipal approvals.

It had acquired the property in a series of transactions between 2020 and 2023.

The site does not have municipal servicing.

In its announcement of the IPO, Plazacorp reports that: “Significant development approval and pre-development progress has been made to date, including zoning and subdivision approvals, finalization of a Master Environmental Servicing Plan in conjunction with the area municipalities, Conservation Authority and Regional government, and assembling a multidisciplinary team of local counsel, architects, planners and engineers to comprehensively design the sites.”

More details about Willowgrove

Plazacorp also intends to forward purchase a 6.8-acre portion of land at the property which is zoned for high-density development for $25 million. Construction of this property will be independent of the rest of the project.

In a proposed development timeline for Willowgrove, Plazacorp projects construction beginning between mid 2026 and Q3 2028 for the various phases, with occupancy beginning as early as February 2027 and continuing through November 2028.

The REDT will be managed by Plazacorp Willowgrove REDT Management Inc., an affiliate of Plazacorp, and administered by a board of trustees, a majority of whom would be considered independent by the REDT. The project will be developed by Plazacorp Upper Markham Management LP, a limited partnership which will be controlled by Plazacorp.

CIBC World Markets Inc. is the sole agent for the offering.

Similar recent IPO funds Anthem project

This is the second such IPO announced recently by a major Canadian developer to raise funding for one of its projects.

Anthem Properties Group just closed its IPO for the Anthem Citizen REDT, which it billed as the first Canadian IPO of its kind. The REDT raised its target $82 million for the 66-storey, mixed-use development Citizen, which is planned in Burnaby (in Metro Vancouver). 

CIBC Capital Markets also acted as the agent for this IPO.  

“The completion of this financing is a win for the Anthem team on many fronts,” Anthem founder and CEO Eric Carlson said in the announcement. “It enables access to housing units for our community, including much-needed market and affordable rentals, in an architecturally significant, multi-use 66-storey tower, which represents innovation by the City of Burnaby when it comes to land use.

"Financially, the IPO of a single asset Mutual Fund Trust is a creative and unique solution to raise the capital required to make this project happen.” 

About Plazacorp

Plazacorp is a Toronto-based real estate investor which is active in the land, low-rise and high-rise development sectors. Among its current projects are the No1 Yorkville, Plaza on Yonge and Yonge at Wellesley Station high-rise developments, as well as numerous low-rise housing projects including the King East Estates in Richmond Hill, just north of Toronto.