Canadian Tire selling its 1.5-million square foot distribution centre

Canadian Tire Corporation announced an agreement to sell its 90-acre industrial property in Brampton, Ont., for $258 million following a North American-wide competitive bid process initiated in the first quarter of 2024.

The property, located at the corner of Bramalea and Steeles, includes 1.5-million square feet of industrial real estate, which is no longer needed for the company’s distribution centre requirements as a result of strategic supply chain investments and consolidation in recent years.

“Fifty years ago, this site was a first-of-its-kind in Canada and a fundamental building block for our supply chain,” said Greg Hicks, president and CEO, Canadian Tire Corporation. “In that same spirit, we have been investing and evolving, introducing modern and sophisticated facilities in the region, which are key to our supply chain of the future.

“Our need for the site has decreased significantly in recent years. This transaction offers a clear example of our ability to surface shareholder value from surplus real estate assets.”

Canadian Tire’s real estate portfolio remains a core asset and a source of potential value through the sale, entitlement or redevelopment of redundant properties. This transaction follows the sales of retail properties in Chilliwack, B.C., and the Greater Toronto Area.

The transaction will result in a pre-tax gain of approximately $240 million on closing and will be treated as a normalizing item. The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

Proceeds will be used to reduce borrowings associated with Canadian Tire’s October 2023 repurchase and consolidation of the Canadian Tire Financial Services business.