Retail property market creates challenge for Target

Target Canada has struggled to find buyers for its real estate portfolio as it exits the country.

According to court documents the retailer has sold $547.8 million in property assets, mainly leases, but that its parent acquired 220 former Zellers leases four years ago for $1.8 billion.

Despite selling some of those to other retailers for U$225 million it leaves a huge shortfall, especially after additional costs of upgrades.

Target is not unique in finding a tough market for offloading retail space but the size of its units is one issue at a time when many retailers are seeking smaller bricks and mortar sites.

John Crombie of Triovest Realty Advisors told the Globe and Mail that vacant retail space in 2015 is set to hit 21 million square feet, which is almost three times the amount that normally comes onto the market annually. 

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