Simon to Open First Premium Outlet Center in Canada
- May 23, 2011
Simon Property Group Inc.’s Premium Outlets division is in growth mode, and it has Canada in its sights. A letter of intent with Calloway Real Estate Investment Trust to develop a property in suburban Toronto paves the way for entrée into Canada.
The new center will be developed about 15 miles west of Toronto in the town of Halton Hills. Plans are in the preliminary stage; however, the partners will be able to skip at least one step on the typical development to-do list, as the designated site is already zoned to accommodate outlet center uses. And it meets the all-important location requirement: The site is on a highway–Hwy. 401–and can be easily accessed by six million area residents within an hour’s drive.
In general, Canada’s retail market weathered the global economic downturn far better than its neighbor south of the border, and all signs point to continued success. “The Canadian retail market, and Toronto in particular, has performed incredibly well in 2010,” John Crombie, national retail director with commercial real estate services firm Cushman & Wakefield Inc., noted in a report at the close of last year. “With the invasion of American retailers, rising rents, lower vacancies and increasing consumer confidence, the retail industry has bounced back and continues to outperform all other real estate asset classes on the investment side.”
But it’s not just the health of Canada’s retail market that bodes well for a Premium Outlet Center in the Toronto area; it’s the type of retail the property will offer. “Outlet shopping is an underserved segment of the retail landscape, and we intend to satisfy the pent up consumer demand,” Halton Hills mayor Rick Bonnette said in prepared statement.
For Simon, extending the Premium Outlets platform into Canada is a natural progression. First off, Premium Outlet Centers are destination retail properties, and a large percentage of the shoppers come from outside the market, if not outside the country, a spokesperson for the company division told CPE. She added that the brand has a loyal following of shoppers from Canada, so there is already a high level of awareness of the type of high-quality outlet shopping a Premium Outlet Center offers.
Simon is expanding the Premium Outlets brand elsewhere, as well. Last week, the company announced it had entered into an agreement with the Gila River Indian Community’s Wild Horse Pass Development Authority to develop Phoenix Premium Outlets in Chandler, Ariz., and a few other properties are already in the construction phase. Merrimack Premium Outlets in Merrimack, N.H., will begin serving the Nashua and metropolitan Boston markets in summer 2012, and Johor Premium Outlets in Malaysia is scheduled to open its doors just an hour outside of Singapore before the close of this year. Construction of Canada’s first Premium Outlet Center is on track to commence in spring 2012.