Canadian Malls See Success via Evolution
- Jan 17, 2020
In Canada, malls are not dying—instead, they’re finding success amid the ever-growing presence of e-commerce, according to the Retail Council of Canada’s new 2019 Canadian Shopping Centre Study. Mall owners are taking a multi-pronged approach to keeping brick-and-mortar stores alive today and well into the future.
RCC’s new report surveys the 30 most productive shopping centers in the country. In 2019, the majority of these prominent retail destinations recorded a year-over-year increase in sales per square foot. Furthermore, 11 malls in the group saw their annual average sales exceed C$1,000 per square foot, which equates to roughly $766 per square foot. However, as noted in the report, “While many of the top shopping centers have seen year-over-year gains, maintaining growth momentum is challenging in light of the impact online shopping has and continues to have on foot traffic.”
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The key to contending with e-commerce and maintaining or growing positive numbers has taken the form of a multifaceted strategy. According to RCC, mall landlords are focusing on creating the most profitable mix of retailers; phasing out underperforming retailers; incorporating new experiential attractions; and maintaining upgrades. Oxford Properties Group’s 2 million-square-foot Yorkdale Shopping Centre in Toronto, which ranks as the most productive property in the survey with C$1,964 (or $1,505) in sales per square foot, has crafted a profitable tenant and merchandise mix with such offerings as a Tesla showroom and a notable list of first-to-Canada retailers. Additionally, Oxford plans to debut a 25,000-square-foot, first-in-the-world entertainment concept at Yorkdale later this year. Park Royal, a 1.5 million-square-foot mall in West Vancouver, B.C., recorded the fourth-highest level of sales at C$1,342 (or $1028) per square foot, marking a year-over-year increase of nearly 47 percent, a jump that landlord Larco Investments attributes to the opening of a new VIP Cineplex Cinema and the closing of less productive outlets such as the recently bankrupt Forever 21.
CF Pacific Centre in Vancouver, CF Toronto Eaton Centre and Southgate Centre in Edmonton. Alb., complete the list of the top five most productive Canadian shopping centers, taking the second, third and fifth spots, respectively. Number-three Toronto Eaton, which underwent a $120 million makeover several years ago, also holds the distinction of being the busiest shopping center in North America, having welcomed 52.3 million visitors in 2019, compared to the U.S.’s top-ranked Mall of America, which opened its doors to 52 million visitors last year.
The Mall of Tomorrow
While new experiences and coveted retail are bolstering foot traffic at Canada’s leading shopping centers, these offerings will not be enough to keep brick-and-mortar retail in the game in the face of the increasingly pervasive world of online shopping. The future for malls is the 24/7 environment. As noted in the report, landlords are adding more non-retail amenities such as destination entertainment attractions, food markets and restaurants, fitness centers, parks, offices and residential towers that aim to transform the shopping venues into all-encompassing community hubs. Citing 2019 figures from the International Council of Shopping Centers, the study notes that 87 percent of Canadian adults claim they would consider living in a mixed-use location that offers live-work-shop-play accommodations.
According to the RCC report, a number of Canada’s top shopping centers have major additions in the works, with plans for integrating elements like residential units and office space over the next five, 10 and 20 years. Park Royal will be home to a 200-unit residential tower by 2021. Over the next three to five years, Western Securities will transform the 60,000-square-foot Stadium Shopping Centre in Calgary, Alb., into a sprawling destination featuring office space, residential buildings, a hotel, a medical center and additional retail space. In Quebec, Cadillac Fairview and Ivanhoé Cambridge will give the Montreal area’s 1 million-square-foot CF Fairview Pointe Claire a new life by developing 4 million square feet of office, residential condominiums and hotels at the shopping center.