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People walk passed a closed Target store location on Barton Street East in Hamilton on April 30, 2015. Executives at major landlords Ivanhoé Cambridge and Oxford Properties Group – which bought back 11 Target store leases for $138-million – said they see the mass retail exit as an opportunity to replace Target and others with stronger retailers.Glenn Lowson/The Globe and Mail

The departure of discounter Target Corp. and a raft of other retailers from Canada leaves landlords with plenty of space to fill at a time when many merchants are downsizing amid the rise of e-commerce.

In all, an estimated 21 million square feet of retail real estate will be vacant this year – almost three times the amount of new retail development that comes on the market annually, John Crombie, senior vice-president of retail leasing at property manager Triovest Realty Advisors, said on Wednesday.

"There are a lot of vacancies coming down," Mr. Crombie said in an interview after his presentation to a retail seminar sponsored by the International Council of Shopping Centres and Ryerson University. "We've had a good run – we're just in a pause now."

Property owners are racing to find replacements for Target and other retailers that have abandoned their stores in Canada, feeling the heat of a fast-changing market and rising digital sales. Landlords feel the pressure to invest in finding new retail tenants and redesigning their empty space, an effort that can take years and reshape many malls.

Even so, executives at major landlords Ivanhoé Cambridge and Oxford Properties Group – which bought back 11 Target store leases for $138-million – said they see the mass retail exit as an opportunity to replace Target and others with stronger retailers.

"We're much better off in four or five years having brand-new, healthy retail in our shopping centres rather than a Target scenario," said Casdin Parr, a leasing manager at Ivanhoé.

In the meantime, Oxford expects it will take until 2016 or 2017 to fill Target space in most of its properties, said Greg Schmidt, director of retail leasing at Oxford.

Ailing Target Canada, which filed for bankruptcy protection on Jan. 15, closed all of its 133 stores by early April after only about two years in this country, resulting in 16 million square feet of real estate being put up for grabs.

Major rivals subsequently bought 38 of the Target leases – Wal-Mart Canada Corp. (12 leases), Canadian Tire Corp. (12), Lowe's Canada (13) and Rona (1) – while landlords bought back 26 leases, preferring to control the choice of tenants in their malls, Mr. Crombie said.

But the Target stores generally are too big for any one retailer, which will force landlords to divvy up the space among multiple retailers, he said. And retailers "are pushing harder for lower rents" and better deals.

Many of the other store closings have been fashion retailers, such as Mexx, Smart Set and Jones New York, while electronics chain Future Shop and photography specialist Blacks also are shutting stores.

On a brighter note, still other retailers are expanding, including U.S. department-store chain Nordstrom Inc. and Saks Fifth Avenue, owned by Hudson's Bay Co., as well as each of their discount chains, Rack and Off 5th, respectively, Mr. Crombie said.

U.S. cheap-chic chain Forever 21 is launching F21 RED, an even lower-priced fashion chain, while rival H&M of Sweden is bringing a higher-end concept, called COS, to Canada, he noted.

Still, the exit of Target and other retailers is taking a toll. Retailers are taking longer to negotiate leases with landlords because of the surplus of retail space available, including mall expansions by some of the leading players, Mr. Schmidt said.

"There's a lot of supply on the market," he said. Retailers "have a lot of options – they don't need to move fast."

At the same time, retailers are feeling the squeeze of a weaker Canadian dollar, which is making it more expensive for American and other foreign retailers to do business here, Ivanhoé's Mr. Parr said. "Deals are getting done – it may just take a little longer than over the past few years."

One of the challenges of replacing Target is that other tenants may not pay as much rent, Mr. Crombie said. Target's rent was generally between $8 to $14 per square foot while so-called "experience retailing" players – such as an indoor surfing operator – bring in only about $2 to $4 per square foot of rent, he said.

Fitness centres will inevitably replace some Target stores but in many cases need only about one-third of the space of a Target outlet, he said.

Mr. Schmidt said when he first found out Target was leaving his reaction was: "Who are we going to lease the space to? But sitting back, it's a huge opportunity for us" because of Oxford's prime locations.

Nevertheless, "a lot of other landlords" will not find it as easy to lease out their Target space, he said.

Matthew Jackson, sales associate at realtor CBRE Ltd., said his initial shock about Target's departure turned into "excitement" about the prospect of finding better retail replacements and then "disappointment" about the "ripple effect" of foreign retailers thinking twice about coming to Canada.

"New retailers we'd been going after for three, four, five years are now saying, 'Let's put Canada on hold for a bit,'" Mr. Jackson said.

This story corrects an earlier version that incorrectly stated Target Canada closed 113 stores when it closed 133 stores