Most major urban centres in Canada are hampered by insufficient rental inventories with scant solutions on the horizon, but as Cadillac Fairview is demonstrating in the nation’s capital, creativity is a welcome first step to solving the shortage.
A mere five-minute walk from Parliament Hill sits one of Canada’s most famous shopping malls, CF Rideau Centre — owned by the aforementioned global owner, operator, investor and developer of commercial and residential real estate assets — where a purpose-built 21-storey rental tower called Rideau Registry is being built.
Preserving the 148-year-old Registry Office building's frontage and moving it roughly 20 metres north for what will become a café bistro, the neighbouring 288-unit residences will also have seamless access to the mall’s O-Train station, part of Ottawa's expanding light rail transit network.
The decision to turn the shopping centre into a mixed-use asset was largely influenced by headwinds that have beset the bricks-and-mortar retail sector for over half a decade, in part a consequence of the sweeping rise of e-commerce.
However, the process was made easier by the fact Cadillac Fairview already owned the property.
CF Rideau Centre and Rideau Registry
The addition of a rental component is a logical next step in densifying properties and optimizing revenue from retail assets.
It is a strategy which has been undertaken by several major retail property owners in recent years, including CF, though this will be its first wholly owned residential development.
The CF Rideau Centre is already a destination for citizens and tourists, sitting at the entrance to the city's Byward Market entertainment and tourist district, especially since a $360-million redevelopment project was completed in 2016.
Wayne Barwise, executive vice-president of development at Cadillac Fairview, told RENX the mall itself is Rideau Registry’s crowning amenity.
“It’s a terrific amenity for people who will live in the Rideau Registry,” he said. “CF Rideau is one of the top retail centres in the country.
"There are lots of amenities in there and lots of opportunities for shopping, and another thing Rideau Registry does is transform the street right now, which is just vacant land and an abandoned building.
"It will turn the street into an active frontage for the Rideau Centre and we think it will be a great addition to the community and a great place to live.”
Purpose-built rental development hasn’t been economically viable in many Canadian markets for decades.
A Statistics Canada report released in September revealed the national homeownership rate was 66.5 per cent in 2021, which is an elevated figure compared to many other countries in the developed world.
However, the same StatsCan report showed Canada’s homeownership rate was 69 per cent a decade earlier, a few years before housing prices began surging upward.
It can be inferred, then, that if home prices become increasingly financially prohibitive, the country’s pool of renters will keep growing.
This demand-side consideration is beginning to disabuse developers of the notion purpose-built rental construction isn’t financially viable.
Immigration to Canada is also increasing at a time when housing affordability is the lowest it’s ever been in the country, which is sure to intensify demand.
Challenging economic conditions
However, there remain challenges.
“The economics are challenging these days,” Barwise said, adding protracted approval times from cities aggravate the problem.
“We do have an advantage in that we have a significant land bank.
"We’re not going out and buying land today at current market prices, but it is true that with inflation and rising interest rates the economics are tight today, which is why it’s a really good thing the government’s recently announced some changes that will accelerate the approval time and help differ some of the costs.”
Rental demand in Ottawa is quite strong.
Aliyah Adatia, sales representative with Royal LePage Team Realty, said well-priced rental listings in Ottawa’s downtown core don’t usually sit on the market for long.
“I think it depends on the price point, truthfully. Anything under $2,000 moves quickly; anything over that, it’s a bit tougher,” she said.
“In Ottawa, we’re a small city so you can leave downtown and in 10, 15 minutes you can . . . get into a suburb and find a townhome to rent.
"We’re lucky that it doesn’t take long to get to certain points in town."
Location, location, location
The 2005 Places to Grow Act mandated intensification in a select host of hubs across Ontario and in late 2012, Ottawa city council approved a plan for the now three-year-old light-rail transit system.
One of the LRT network’s stops is at CF Rideau Centre, which residents of the Rideau Registry can access without having to venture out into the cold.
The suites have more glass to let sunlight fill the wide and shallow units, as well — an atypical design strategy in the rental market — while amenity packages cater to families, children, business meetings and entertainment.
The tower will also incorporate several sustainability features.
“The features of the building have some of the best environmental practices being incorporated into the building, like a geothermal heat pump system,” Barwise said.
“The energy savings are anticipated to be five to 10 per cent better than the building code and the greenhouse gas savings will be five to 10 per cent better than the building code as well.”