Shareholders of H&R Real Estate Investment Trust voted to shed 70 per cent of the company’s portfolio to focus exclusively on the apartment and warehouse assets that have done better than retail and office properties during the COVID-19 pandemic.

The plan approved Monday calls for H&R to spin off its entire portfolio of enclosed malls as a separate listed entity, and then sell off its remaining strip malls and office buildings to become a company that owns and develops nothing but apartment buildings and warehouses within five years. 

H&R REIT’s shares were down about 1 per cent at 10:50 a.m. in Toronto. They’re up about 17 per cent this year.

Lockdowns and the recurring need to maintain social distance throughout the pandemic have hastened the adoption of both e-commerce by shoppers and remote work by companies, crimping demand for malls and offices while increasing demand for logistics space and bigger homes. 

The Toronto-based commercial property owner’s restructuring plan is one of the most dramatic reactions to these changes in the commercial real estate world, and a tacit acknowledgment that the US$3.5 billion company’s management expects they are here to stay.