Primaris Real Estate Investment Trust has agreed to sell its 50% managing interest in Cataraqui Centre in Kingston, Ontario, for $41.8 million, continuing its strategy of disposing of selected shopping centre properties while directing investment toward other Canadian retail assets.
The transaction, announced October 16, is expected to close by January 6, 2027, subject to customary closing conditions and any required regulatory approvals. The purchaser has not been publicly identified, and Primaris intends to use the net proceeds for debt repayment and general trust purposes.
The sale comes as Primaris completes its $411-million acquisition of Upper Canada Mall in Newmarket, Ontario. The two transactions provide an interesting comparison of how the REIT is allocating capital across its Canadian shopping centre portfolio, including properties with substantial vacant retail space.
Cataraqui Centre Faces Significant Vacancy
Located at 945 Gardiners Road, Cataraqui Centre spans approximately 572,600 square feet and serves Kingston and surrounding communities in eastern Ontario. The enclosed shopping centre opened in 1982 and underwent renovations in 2022.
Its tenant mix includes Sephora, Sport Chek and Marshalls, along with fashion, footwear, beauty and service retailers. According to Primaris, the property currently has 67% in-place occupancy, leaving considerable space available for leasing.
The largest vacancy is the former Hudson’s Bay department store, which occupied approximately 113,000 square feet. The location closed during the retailer’s nationwide liquidation in 2025, removing a major anchor tenant from the shopping centre.
Primaris regained control of the former department store premises in June 2025 following the disclaimer of Hudson’s Bay’s lease during insolvency proceedings. The space represents a substantial re-leasing opportunity, although no replacement tenant or specific redevelopment plan has been announced.
Despite its vacancy challenges, Cataraqui Centre continues to generate significant retail sales. Primaris reported current same-store sales productivity of $639 per square foot in its October 16 announcement, compared with $626 per square foot for 2025 and $616 in 2024.
Re-leasing a former department store of this size can involve subdividing premises, upgrading building systems and accommodating the requirements of incoming retailers. Such projects can require substantial capital, with costs and potential returns varying considerably between properties.
Primaris Continues Portfolio Reshaping
Primaris has been actively adjusting its Canadian shopping centre portfolio through acquisitions and dispositions, concentrating investment in properties where management sees stronger long-term growth opportunities.
The REIT has identified approximately $500 million in potential dispositions over three years, including selected non-core shopping centres, land and outparcels. The Cataraqui Centre transaction is part of that capital-recycling program.
“The sale improves overall portfolio quality, reduces exposure to assets with more limited growth opportunities, simplifies ownership structures, and provides additional financial flexibility to support strategic growth initiatives and capital allocation priorities,” said Alex Avery, Chief Executive Officer of Primaris REIT, in the company’s announcement.
The disposition will eliminate Primaris’ managing interest in a property it has classified as non-core. The REIT has not disclosed the specific financial assumptions behind its decision to sell, although its stated strategy involves directing capital toward assets expected to deliver stronger long-term value.
The company has also been consolidating ownership of selected shopping centres. Earlier in 2026, Primaris acquired the remaining 50% interest in Regent Mall in Fredericton, New Brunswick, for approximately $64 million, bringing that property under full ownership.
The Regent Mall acquisition provides an important distinction. Primaris continues to invest in regional shopping centres outside Canada’s largest metropolitan markets, while making different investment decisions about individual properties.
Upper Canada Mall Acquisition Shows Investment Priorities
Primaris completed its $411-million acquisition of Upper Canada Mall in Newmarket on October 15, adding approximately 990,000 square feet of retail space to its portfolio. The shopping centre serves Newmarket and the northern Greater Toronto Area, with retailers including Apple, Aritzia, Browns, Lululemon, Uniqlo, Sport Chek and Winners.
As previously reported by Retail Insider, Upper Canada Mall generated approximately $888 per square foot in annual tenant sales productivity and $271 million in annual commercial retail unit sales.
Its reported sales productivity is considerably higher than Cataraqui Centre’s $639 per square foot. The figures cover different reporting periods, but they provide a useful indication of the relative sales performance of the two properties.
Upper Canada Mall also has substantial vacant retail space. Primaris identified approximately 263,400 square feet of former anchor and large-format premises with potential for re-leasing, creating opportunities to introduce additional tenants and increase rental income.
The Newmarket property occupies approximately 76 acres, providing potential for future development. Its location in the northern Greater Toronto Area also offers access to a substantial regional customer base, although leasing and development returns will depend on market demand and capital requirements.
Both properties therefore present opportunities to generate income from vacant space, but the financial prospects of those opportunities can differ considerably. Sales productivity, demographics, tenant demand and the cost of preparing premises for new occupants all influence the economics of repositioning a shopping centre.
For Primaris, Upper Canada Mall represents a substantial investment in a property where management sees opportunities for income growth. The Cataraqui Centre disposition reflects the REIT’s decision to direct capital elsewhere within its portfolio.
The Future of Cataraqui Centre
The sale comes as Canadian shopping centre owners continue addressing vacancies left by Hudson’s Bay’s collapse. The retailer’s departure created large blocks of available space across the country, requiring landlords to assess replacement tenants, subdivision opportunities and alternative uses.
For regional mall owners, the financial challenge involves balancing the cost of re-leasing or repositioning vacant space against the rental income that can realistically be achieved. Properties with stronger tenant sales and established demand from expanding retailers may offer more attractive returns on that investment.
Cataraqui Centre remains an established retail destination in Kingston, with national tenants and considerable available space. The proposed transaction will introduce a new ownership arrangement as decisions about the former Hudson’s Bay premises and other vacancies remain outstanding.
The sale is expected to close in early January 2027. Further details about the purchaser, future property management and potential leasing plans have yet to be announced.
