You've got a Target? We're in

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Melissa Tait / Winnipeg Free Press Kildonan Place general manager Peter Havens says Target is definitely one reason the mall is attracting new tenants. (MELISSA TAIT)

The jockeying for position has begun as local retailers gear up for next year's game-changing arrival of Target Corp.

Kildonan Place Shopping Centre, one of the five shopping centres in Manitoba that will be getting a Target store, recently signed two new tenants -- River City Sports and State & Main Kitchen and Bar.

In both cases, one of the reasons they're coming to the mall is because Target is coming to the mall, said Kildonan Place general manager Peter Havens.

"It was definitely part of the equation. And going forward, it's definitely going to be an enhancement to our leasing packages and will help us attract new tenants to Kildonan."

Havens said Target's presence was particularly relevant to River City Sports, because its 5,000-square-foot store will be next door to Target in the Regent Avenue mall.

The owner of River City Sports was unavailable.

However, the founder and chief executive of the company that owns the new State & Main restaurant chain -- Calgary-based FranWorks Group of Companies -- confirmed Target was very much on their minds when FranWorks officials were deciding where to put their first local outlet.

"Target was definitely a factor when we selected this location," Derek Doke said in a statement. "We feel it will be a very good draw for the mall and positive for our business."

Havens said both stores will be opening in September.

The U.S. discount department store chain burst onto the Canadian scene last year by acquiring the leasehold rights to up to 220 Zellers stores from Hudson's Bay Co.

It later announced it would only be keeping 125 to 135 of the stores, and converting them to Target stores at a cost of $10 million to $11 million each. The conversions will begin later this year, and Target said late last month it expects to begin reopening the stores in March or early April of next year.

The other local shopping centres getting Target stores are Polo Park, Grant Park and Southdale Centre in Winnipeg, and Shoppers Mall in Brandon.

Officials for the other four centres and Target Canada could not be reached.

Havens said Target plans to close its 120,000-square-foot Zellers store in Kildonan Place in November, so it can begin the renovations.

He said Target plans to completely gut the interior and rebuild it to match the standard Target format. The store's entrance will also be relocated.

Havens said the renovations are expected to take about six months to complete.

Target's impact on the Canadian and local retail markets was one of the topics at a commercial real estate forum held last week in Winnipeg.

Local retail leasing specialist Michael Stronger of Shindico Realty Inc. said other retailers want to be near dominant industry players such as Target and Walmart because of their immense drawing power.

Shoppers flock to them, and that usually means more customer traffic for everyone else around them.

He said the first thing new entrants to the Winnipeg market want to know is the locations of the dominant regional malls and the Walmart and Target stores.

"Everybody wants to be where the action already is, where the traffic generators are."

He said one of the biggest challenges leasing agents and retailers face is finding space in the most popular retail nodes. "It seems everyone who is here wants to open more stores, but can't find the right space," Stronger said. "I could probably do 20 more deals tomorrow if I could find the right space."

He said some larger-format retailers are even thinking of going with a smaller version of their store if it's the only way they can get into one of the preferred locations.

He said the Grant Park and Southdale centres could benefit the most from having Target as a tenant because they're smaller, and smaller centres often get overlooked by new retail entrants to the market.

But with Target there, they won't be overlooked anymore, he predicted.

"Now there are two new (retail) nodes on the map that these retailers will be taking notice of."

Stronger said even smaller retail centres in close proximity to the ones where Target is going could benefit from the increased traffic in the area. An example he cited is Shindico's Grant Park Festival on Taylor Avenue, near Grant Park Shopping Centre.

Other retail specialists at last week's forum agreed Target's entry into Canada is creating the biggest industry shakeup since Walmart burst onto the scene in 1994.

They said even Walmart is taking steps to defend its turf by aggressively expanding its grocery retailing operations, snapping up 39 of the Zellers outlets Target didn't want, and by dropping the price on some of its products.

Know of any newsworthy or interesting trends or developments in the local office, retail, or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 697-7254.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition April 23, 2012 B5