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Yorkdale, CF Pacific Centre top 2019 shopping centres study

Shopping centres across Canada are evolving into “living centres” as owners and property managers...

IMAGE: The CF Pacific Centre saw a 10 per cent increase in sales per square foot during 2019, according to the Retail Council of Canada's annual survey of shopping centres. (Courtesy CF)

The CF Pacific Centre saw a 10 per cent increase in sales per square foot during 2019, according to the Retail Council of Canada’s annual survey of shopping centres. (Courtesy CF)

Shopping centres across Canada are evolving into “living centres” as owners and property managers create live, work, play and shop environments to attract customers, according to the Canadian Shopping Centre Study 2019.

“They’re building small villages,” said Retail Council of Canada president and CEO Diane Brisebois in an interview with RENX. The council compiles the annual study.

Condos, apartment buildings, office spaces and even parks are being constructed to enhance what has traditionally been retail land.

For example, Oxford Properties has proposed a 20-year plan to the City of Toronto for a mixed-use “mega-city” site including up to 1,500 rental units at Yorkdale Shopping Centre, which was the top-performing mall for the fourth straight year in 2019.

The towers would be built in existing parking areas.

“That reflects the way Canadians relate to their environment, to their experiences, to the way they want to interact with others and with businesses,” said Brisebois. 

“And so, this is not just a trend. This is, in fact, a reality for the shopping centre community right across the country.”

“Substantial” capital investments

The bricks-and-mortar revitalization continues across Canada. Out west, for example, there are similar development plans for CF Richmond Centre (No. 9 on the list) in Richmond, B.C.

“They’re now going to be including a new retail indoor-outdoor configuration and several multifamily residential buildings on the current parking lot,” Brisebois said. 

The south-end expansion will replace the former Sears store, which was an anchor tenant at the mall.

Enterprising landlords are continuing to make “substantial” capital investments, she said, to meet the demand from consumers for innovation.

Millennials and Gen Z, who are shunning cars and asking for walkable communities, are largely responsible for that demand.  Adding housing is a win-win for everyone.

“You increase traffic in all of the locations within that space,” said Brisebois. “They’ll be at a restaurant, a theatre or a retail location.”

Shopping centres as communities

In addition, it provides convenience for consumers.

”If you’re looking at the new generation, from millennials and Gen Z, more and more of them are wanting to live in a community where they have easy access to all of the services that they want to use,” she said. “By services, I include retail as well.”

Brisebois has been leading the RCC since 1995. Prior to that, she was the president and CEO of the Canadian Office Products Association for 14 years. In all, she has spent more than 38 years leading retail industry associations in Canada.

Although many top shopping centres 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,” the report reads. 

Landlords are “actively leveraging several strategies in tandem: securing the most profitable mix of retailers, phasing out underperforming tenants, adding novel attractions and keeping up with ongoing facility upgrades.”

An example is the experiential, interactive Dr. Seuss exhibit at Mississauga’s Square One (No. 7 on the list), which has been a very popular Instagram subject from the time it opened last October. 

Despite the cost — tickets are $29 for children and $35 for adults excluding taxes and fees (that’s $150 or more for a family of four) — it’s so popular the exhibit has been extended until March 22.

“Main Street” experiences

Shoppers can expect more creative endeavours, Brisebois said, including art exhibits, partnerships with museums, artists, musicians, famous chefs and the like.

“So what you would see on Main Street is what they are building within mall properties,” she said. “It’s like walking through a vibrant village.”

Finding ways to bring people in and keep them in the “village” for longer periods of time is all part of the strategy.

“The only way you can do that is by looking at the customer and . . . what kind of lifestyle they have, what they’re interested in. It’s no longer just about buying the product,” said Brisebois. 

“It’s about what they do in a week . . . they eat, they go out. They meet friends. They do wine-tasting. They go to see an art exhibit . . . they meet artists and the likes. They get their dry cleaning. They want to look at a new car design.

“You know, all of those experiences that you live in a week is what malls are trying to recreate in their environment in order for you to basically live there.”

Yorkdale tops again in 2019

Overall, most of Canada’s top centres saw year-over-year gains in sales per square foot in 2019.

Yorkdale again topped the list in terms of annual sales with $1,964 per square foot in 2019, for a 3.1 per cent increase year-over-year.

“If it sees just a two per cent increase in 2020, it will surpass the $2,000 per square foot annually – the new ‘high benchmark’ for shopping centres in Canada,” the report reads.

Only a handful of U.S. malls have surpassed the $2,000 benchmark in U.S. dollars, including Bal Harbour Shops near Miami, The Grove in L.A., and the Mall at Rockingham Park in Salem, N.H.

Second spot in Canada went to CF Pacific Centre in Vancouver, with $1,865 per square foot — up 10.4 per cent year-over-year. The increase comes thanks to new retailers such as Canada Goose and proven top performers including Harry Rosen. Nordstrom’s top-selling store in the entire chain (as of Q3 2019) is at CF Pacific Centre.

In third place, CF Toronto Eaton Centre netted $1,592 per square foot in 2019, a year-over-year hike of 2.3 per cent.

Park Royal in West Vancouver came in fourth with $1,342 per square foot — up a staggering 47 per cent. It’s the highest increase tracked in the last four years.

Landlord Larco attributes the jump to “increased foot traffic from a newly opened VIP Cineplex Cinema, highly productive retailers such as Tesla, and the addition of new retail tenants,” the report reads. 

The spike comes following a $150 million upgrade to the mall. A residential development, Gateway Residences Park Royal, is slated to open on-site in 2021.

Southgate Centre in Edmonton was fifth at $1,121 in sales per square foot. It’s the only mall among the top five to see a slight decline, from $1,128 in 2018.

The rest of the Top-10

Rounding out the Top 10 are:

6. Calgary’s CF Chinook Centre, $1,119: Its first time surpassing $1,100 thanks to new additions including Louis Vuitton and Saks Fifth Avenue;

7. Square One in Mississauga, $1,108. Also squeezing past $1,100 for the first time. Owners Oxford Properties and AIMCo noted the mall saw a boost after opening ‘The Food District,’ The Rec Room and bringing in new retailers such as Uniqlo; 

8. Toronto’s CF Sherway Gardens, $1,099: Up 9.7 per cent versus 2018; 

9. CF Richmond Centre in Richmond, B.C., $1,073;

10. Metropolis at Metrotown in Burnaby, $1,042;

A newcomer to the Top-30 list this year is the Montreal Eaton Centre, ranking 13th overall with $983 in sales per square foot.

“They made the cut because of the substantial investment in the mall itself,” said Brisebois, highlighting the new experiential food hall, “where they’re bringing in some of the top chefs, some of the hottest restaurant brands.”

Catering to the vegan lifestyle is playing an instrumental role, too.

“All of that has made that mall more attractive, has made it a destination,” said Brisebois.

There were no surprises on the list, said Brisebois.

“We are pleased, though, from a retail perspective, to see the amount of investment that’s being made because it will obviously benefit the retail tenants as much as it will other tenants.”

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