Mall doing just fine in Target’s wake
The parent company of the Medicine Hat Mall has seemingly absorbed the blow dealt by U.S. retailer Target’s quick shutdown of Canadian expansion three years ago, according to new reports from H&R REIT.
In fact, the mid-2017 financial report from the real estate income trust states it is set to more than double its rental income from the more than 750,000 square-feet abandoned in early 2015.
At that time Target broke leases with commercial landlords, including a number across Canada with H&R subsidiary Primaris. The rent at all locations totalled $4 million per year.
After a huge redevelopment program, H&R expects to eventually collect up to $10.1 million in rent on the same reconfigured space, the statement reads.
The company’s six-month financial statement, released this week, states Primaris has spent $42.5 million across Canada in 2017 to develop the former Target spaces into smaller bays.
At Medicine Hat, the 100,000-square-foot Target space bay was converted to mid-sized bays, and a new food court that opened this month. New work began this month on the former food court for opening in late 2018.
Across the company, about one-third of the former Target space is already occupied by new tenants, with another third the focus of signed or conditional agreements. About 20 per cent of the space will either be demolished or become common space in redevelopments.
The second-quarter financial report also tells investors the company will be exposed to the recently announced closure of two Sears outlets, in Medicine Hat and St. John, N.B. The combined rent at the two is about $900,000 per year.
The firm is the landlord at seven other Sears locations in Canada which remain in operation.