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There's a flurry of sales happening at Canada's outdoor malls, and it has nothing to do with back-to-school savings.

The malls themselves are being snapped up by investors who crave the steady returns generated by shopping centres with large tenants such as Wal-Mart, Canadian Tire and major grocery chains.

It's not a vote of confidence in the economy. Rather, the transactions underscore the uncertain picture for consumer spending as the economy slows and unemployment remains stubbornly high. Bearish landlords are buying the properties because the profile of the main tenants fits the tough times: They either sell consumer staples such as food and drugs, or cheap merchandise that appeals to cost-conscious consumers, meaning they are less likely to suffer a major sales decrease or hit financial trouble.

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"We don't see a particularly strong recovery happening, so this is the kind of property that we think is a good use of capital," said Simon Nyilassy, chief executive officer of Calloway which said Tuesday it would spend $131-million to buy malls in Laval, Que., and Sarnia, Ont.

It's the first time in two years the investment trust has made a purchase, though it has expanded several of its 127 properties.

Calloway's occupancy rates dipped to about 98 per cent through the recession, and are already above 99 per cent. Mr. Nyilassy said that alone explains the high level of interest the malls are generating as they come to market.

"We've really been out of the game for a few years," Mr. Nyilassy said. "But we find we are able to tap capital and pick up some things that we like. And there are other people at the table now - there's not a lot being built, so when something comes available, people are interested."

RioCan REIT - Canada's largest real estate investment trust and the country's largest owner of so-called power centres - bought two Wal-Mart-anchored properties in Hamilton, Ont., and Gatineau, Que., for $102-million last week.

Meanwhile, in British Columbia, an unidentified private investor spent $91-million in a deal for Surrey's South Point Exchange shopping centre in a deal that closed yesterday. The recently expanded mall has 32 tenants and is anchored by such stores as Save On Foods, Canadian Tire, Staples and Winners/HomeSense.

The deal is the largest retail investment by a private purchaser in more than a decade in Western Canada, said Avison Young principal Bob Levine. The deal was negotiated months ago, he said, and the buyer likely received a better price because others weren't ready to commit.

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"While there have been larger sales of enclosed malls, this sale is the largest open-air mall retail investment transaction in Western Canada so far in 2010," he said.

The mall was formerly owned by Grosvenor Americas and institutional investors. They had tried to sell the property at the height of the recession, but couldn't find any takers. The private buyer found an old sales brochure a few months ago and asked whether a deal could be struck.

"What's happening is these properties have things like grocery stores and pharmacies," said Avison Young's Michael Gill. "Buyers are thinking, 'If we go into another recession, people still need food and drugs.' Owners are picking up on this, and they don't mind selling if the prices are right."

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