Canadian Tire has agreed to sell a 1.5-million-square-foot industrial property in the Toronto suburb of Brampton, Ont., to an undisclosed buyer for$258 million.

The company announced the agreement in a news release Friday. The proposed deal came after a competitive bid process launched in the first quarter of 2024.

The 90-acre property is located at Bramalea Road and Steeles Avenue. It is no longer required for the company’s distribution operations.

“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 of Toronto-based Canadian Tire. “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.”

The sale of the Brampton property comes as Canadian Tire continues to optimize its real estate portfolio. The company has recently divested other surplus properties, including retail locations in Chilliwack, B.C., and the Greater Toronto Area, as disclosed in its quarterly results earlier this year.

The Brampton transaction is expected to close in the fourth quarter of 2024, subject to customary conditions. It is anticipated to result in a pre-tax gain of approximately $240 million, which will be treated as a normalizing item, the company said. Canadian Tire plans to use the proceeds to reduce borrowings related to its October 2023 acquisition of its financial services division.

The sale underscores Canadian Tire’s broader strategy to unlock value from its real estate assets, either through sales, redevelopment, or entitlement of properties deemed surplus to operational needs, the company said.

Canadian Tire, established in 1922, is a leading Canadian retailer offering products for everyday life across categories such as living, playing, fixing, automotive, and seasonal goods. Its network includes nearly 1,700 retail and gas outlets under banners like Canadian Tire, Mark’s, SportChek, and Helly Hansen, employing tens of thousands of people in Canada and globally.

The company also operates the financial services division and owns CT REIT. Canadian Tire leases many of its retail locations through the REIT.

Canadian Tire retained Colliers to arrange the offering as either a 100% freehold interest or a joint-venture with CT REIT.

The site is “truly a trophy asset, and one of the last remaining infill properties of scale, in the most highly desirable industrial submarket in the Greater Toronto Area (GTA),” states a Colliers listing.

“The property is one of the last remaining large infill properties in the GTA offering scale, highly functional building features and a competitive advantage well below replacement cost,” the commercial real estate services company adds in the listing.