Primaris Real Estate Investment Trust has negotiated replacement tenant deals for its former Toys “R” Us locations across Canada, with incoming retailers expected to take possession at various points during 2027.
The Toronto-based REIT previously had six Toys “R” Us stores occupying approximately 145,000 square feet in its portfolio. Primaris expects to achieve substantially higher rents from replacement retailers following the closure of the stores and termination of their leases.
During the company’s October 29 third-quarter earnings call, President and Chief Operating Officer Patrick Sullivan provided an update in response to BMO Capital Markets analyst Tom Callaghan.
“We have got tenants and negotiated deals for all the boxes,” Sullivan said, noting that the agreements are at different stages of completion.
Some leases have been executed, while others are still being finalized. Sullivan expects replacement tenants to take possession during 2027, with some beginning to pay rent that year.
Former Toys “R” Us Stores Offer Higher Rental Potential
The original six locations covered approximately 145,000 square feet and previously paid average rent of about $12.40 per square foot, according to earlier company disclosures.
Applied to the historical portfolio footprint, that equates to approximately $1.8 million in annual base rent before accounting for vacancies and individual lease arrangements. The calculation illustrates the previous rental economics and does not represent a forecast of replacement income.
Primaris has indicated that negotiations with replacement retailers are producing substantially higher rents, although it has not disclosed enough information to calculate the eventual increase in net operating income.
During the company’s fourth-quarter 2025 earnings call, Sullivan said Primaris had terminated the six leases, primarily because other retailers had expressed interest in the spaces.
The higher replacement rents could improve income from existing properties without requiring new shopping centre development. Some premises may need to be divided or reconfigured, however, and the financial benefit will depend on when tenants begin paying rent.
Old Navy Taking Part of Former Toys “R” Us at Dufferin Mall
At Dufferin Mall in Toronto, Old Navy is taking part of the former Toys “R” Us premises. The retailer’s planned arrival was reported in July, when mall management indicated the new store would be located next to Telus, with a November opening anticipated.
Sullivan confirmed during the October earnings call that Old Navy was taking a portion of the former toy-store space and that Primaris had secured another retailer for the remainder.
“We have got a lease signed for the remainder, so that lease is executed,” he said.
The second retailer was not identified, and Primaris has not disclosed the square footage allocated to each tenant. Old Navy’s final opening date has also not been independently confirmed.
Stone Road Mall Among Properties Affected by Closures
Stone Road Mall in Guelph, Ontario, was another Primaris property affected by the Toys “R” Us closures.
The approximately 17,000-square-foot store closed in January after Primaris terminated the retailer’s lease for non-payment of rent, according to GuelphToday. The location had opened in November 2020, following an earlier smaller-format presence at the shopping centre.
Primaris has not publicly identified a replacement retailer for the Stone Road Mall premises in the material reviewed. Sullivan’s October comments indicate that negotiations have progressed across the former stores, although individual lease execution dates have not been disclosed.
Upper Canada Mall Adds Another Former Toys “R” Us Location
Primaris acquired another substantial former Toys “R” Us location through its recent purchase of Upper Canada Mall in Newmarket, Ontario.
The REIT completed the $411-million acquisition on October 15, adding a 990,114-square-foot regional shopping centre to its portfolio. The property includes approximately 47,600 square feet of former Toys “R” Us space identified as being under leasing negotiations in Primaris’s September acquisition announcement.
Upper Canada Mall was acquired after Primaris disclosed the original six-store portfolio figures. Its former Toys “R” Us premises should therefore be treated separately from that historical total, and the company has not clarified whether Sullivan’s October leasing comments included the newly acquired space.
The shopping centre also contains approximately 142,800 square feet of former Hudson’s Bay space and 73,000 square feet of former Sears space committed to two national retailers. These larger vacancies and leasing commitments are among the opportunities Primaris identified when announcing the acquisition.
Jumbo Preparing Canadian Debut at Vaughan Mills
Outside the Primaris portfolio, another former Toys “R” Us location is being repurposed for an international retailer at Vaughan Mills, north of Toronto. The shopping centre is co-owned by Ivanhoé Cambridge and LaSalle Investment Management, with Ivanhoé Cambridge serving as asset manager, according to their official ownership announcement.
Greek discount and general merchandise chain Jumbo plans to open its first Canadian store in approximately 47,042 square feet previously occupied by Toys “R” Us. The premises are near Entrance 3, between HomeSense/Winners and Hockey Life.
Fox Group Jumbo Canada acquired the lease through the court-supervised Toys “R” Us Canada restructuring. The transaction received court approval in June and closed on July 8, 2026, according to the court-appointed monitor.
As Retail Insider reported in September, the store is targeting an early 2027 opening and will sell toys, home goods, seasonal merchandise, baby products and other general merchandise.
The Vaughan Mills transaction offers another example of how former Toys “R” Us premises are being reused. In this case, the space will introduce a new international retailer to Canada, with a broader merchandise assortment than the former toy chain.
Toys “R” Us Canada Entered Bankruptcy in October
Toys “R” Us Canada sought creditor protection under the Companies’ Creditors Arrangement Act on February 3, 2026, following financial difficulties and store closures.
The proceedings involved transactions covering the company’s assets, intellectual property and retail leases. Ad Populum acquired the Toys “R” Us and Babies “R” Us intellectual property, while other assets and business interests were transferred separately.
According to Alvarez & Marsal, the court-appointed monitor, the restructuring proceedings concluded on October 5, 2026. Toys “R” Us (Canada) Ltd. made an assignment in bankruptcy that day, with The Fuller Landau Group Inc. appointed trustee.
The bankruptcy of the original operating company is distinct from the ownership of the Toys “R” Us brand, which was transferred during the restructuring. For shopping centre landlords, the immediate consequences have included recovering premises, negotiating replacement leases and preparing vacant stores for new occupants.
Replacement Tenants Expected to Take Possession in 2027
Primaris expects replacement tenants to begin taking possession of its former Toys “R” Us spaces during 2027, with some rent commencements anticipated during the year.
At Dufferin Mall, a lease has been executed for the portion of the former store not being taken by Old Navy. Other agreements remain at various stages of finalization, and Primaris has not disclosed a complete list of replacement retailers or confirmed opening dates for every location.
The financial benefit will depend on the rents achieved, any work needed to accommodate the incoming retailers and when payments begin. For Primaris, the objective is to replace a former tenant paying relatively low rents with new retailers expected to generate higher income from the same shopping centre space.
