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A Canadian flag flies on a vehicle parked outside a Target store in Hamilton, in this January 15, 2015, file photo.Peter Power/Reuters

RioCan says it has begun negotiations with retailers that could potentially use some of the space in 15 former Target Canada stores that have been returned to the real estate investment trust.

RioCan says it will seek payments from Target for lost rental revenue under the terms of a guarantee from the U.S. company, which closed all 133 Canadian Target stores during the first quarter.

RioCan says the space at the 15 former Target Canada stores represented about $8.6-million of annual revenue – a small fraction of the total.

An additional 11 former Target Canada locations in RioCan's property portfolio remain part of the retailer's court-supervised windup. An auction of the dozens of Target Canada leases is scheduled to be held this week in Toronto.

RioCan's update was included with its first-quarter financial report Tuesday, which said no individual tenant generated more than 4.1 per cent of annualized rental revenue. Its biggest source of revenue was the Loblaw-Shoppers Drug Mart group.

RioCan's net earnings dropped by 48 per cent to $89-million in the three months ended March 31, from $171-million in the first quarter of 2014. That amounted to 27 cents per unit of net income, down from 55 cents a year earlier.

However, RioCan said its funds from operations in the three months ended March 31 were still up 8.8 per cent from a year earlier, rising to $138-million or 44 cents per unit.

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