Primaris REIT’s new leasing strategy, an approach that aims to fill vacancies left by longtime retailers Hudson’s Bay Co. and Sears, reflects Canada’s current economic landscape where shoppers are looking for lower prices.

“We’ve done some leasing with Walmart. They are very keen to expand,” Primaris CEO Alex Avery told CoStar News. “They have a big budget to expand in Canada, and we’re working on a number of leases with them. We announced one in Hamilton.”

Primaris said last week that Walmart is the previously announced 139,000-square-foot tenant at the former Sears space at Lime Ridge Mall.

Primaris also said it plans to spend $125 million to $150 million to improve its former Hudson’s Bay Co. locations, as well as $20 million to $30 million at all former Sears stores that are slated for demolition. Primaris said a total of 303,000 square feet of former Sears space at Les Galeries de la Capitale and Oshawa Centre will be demolished “to facilitate retail outparcel development and land sales to mixed-use developers.”

The REIT also announced short-term leases with retailer Les Ailes de la Mode at Promenades St. Bruno on Montreal’s south shore and at Galleries de la Capitale in Quebec City.

Canada has lost big-box anchor tenants such as HBC and Nordstrom in recent years. These retailers were known for carrying luxury clothing brands that, looking at the country’s economic data, might seem at odds with consumer needs.

According to the Equifax Canada’s Q3 2025 report, 1.45 million Canadians missed non-mortgage credit payments, a significant quarterly increase, and that the 90+ day delinquency rate was 1.63%, an increase of 14% year-over-year.

Moreover, total consumer debt increased by 3.4% year-over-year to $2.62 trillion. The average non-mortgage debt per Canadian also increased by $511 during that period to $22,321. Canadians between the ages of 18 and 35 and homeowners in major urban centres were responsible for the greatest increases in missed payments, the report said.

That explains, to a great extent, Primaris’s decision to expand leasing agreements with a discount retailer like Walmart.

“Walmart often says that Canada is one of their favorite markets in the world,” Avery said. “What they don’t say directly, but what they intimate, is that the reason is the average consumer in Canada is relatively poor.”

Walmart did not immediately respond to a request for comment.

The REIT has now taken full control of all of its former HBC gross leasable spaces, comprising 1.3 million square feet, as well as all 500,000 square feet of former Sears stores, paving the way for accelerated negotiations with retailers.

This should also enable Primaris to take advantage of market opportunities, Avery said. During the last decade, HBC was, historically, among the least productive department store anchors because it paid exceptionally low rent, held very restrictive lease terms, and experienced waning interest in its products.

Primaris intends to capitalize on the scarcity of new retail development across Canada over the last decade, during which time the population has increased by 17%.

Moreover, shopping malls in the country have been evolving over the past two decades, with diminished importance of anchor tenants as other retail tenants draw shoppers away from department stores. Malls have instead begun offering targeted and specialized offerings, and their aggregated sales volume has surpassed that of anchor tenants.

Keith Reading, Morguard’s director of research, said the HBC store closings have infused the market with attractive retail space, and he believes Primaris is well-positioned to take advantage of new opportunities.

“It’s brought some quality space in a market where there’s been quite a shortage of high-quality space, because we just haven’t seen a lot of development of new retail over the last few years,” Reading said in an interview. “It is an opportunity for those owners.”

That Canadians aren’t flush with disposable income belies the opportunity Reading alluded to. He said stores like Walmart and Winners have done well in Canada as a result.

“The traditional department store format has gone the way of the dodo bird. It’s a thing of the past, and we’ve known that for some time,” Reading said. “Shoppers have different needs, certainly in this environment. They’re looking to tighten their purse strings and are more inclined towards discounters. Stores like Winners have done really well because they’ve met that demand for discount retail.”

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