Shopping centre owners spending big bucks to become major destinations for shoppers are continuing to see those investments pay off, according to the Canadian Shopping Centre Study 2018.
Although malls across Canada are seeing growth, report author Craig Patterson said Greater Toronto Area shopping centres are leading the way in innovation and aesthetics: “We have the best-looking malls by far,” said Patterson, a retail analyst, and founder and editor-in-chief of Retail Insider. He created the report for the Retail Council of Canada.
For instance, Yorkdale Shopping Centre, Square One and CF Sherway Gardens — “they don’t have those in Western Canada, really, and I’ve been to all of them,” said Patterson. “These are really great malls. They’re some of the better ones in the world, I think . . . they’re simple and clean-looking.”
Major investments across Canada
While top-end Toronto-area facilities might be leading the way, the investments are happening from coast to coast. Hundreds of millions of dollars — per shopping centre — continue to be spent on upgrades to attract potential shoppers: “People are still searching (for) experiences,” he said.
At CF Toronto Eaton Centre, for example, “the landlord has spent more than $500 million in the last few years on the centre, which is incredible,” said Patterson. “The centre has transformed.”
That includes attracting a Saks Fifth Ave. store to the Hudson Bay building, plus Nordstrom, Uniqlo, Samsung, “and then H&M renovated, so there’s been a lot of stuff happening,” he said.
Out West, Vancouver’s CF Pacific Centre has spent “well over $100 million and that (project) has been ongoing for years,” Patterson said.
Calgary’s CF Chinook Centre is spending about $17 million on the food court alone as part of a $180-million renovation, said Patterson. The project includes a $14.5-million pedestrian bridge connecting to a transit station, the cost of which was shared by Cadillac Fairview and the City of Calgary.
It is designed to increase foot traffic into and through the facility.
Top 10 shopping centres
Most of Canada’s top shopping centres saw gains in sales per square foot in 2018 compared to 2017, the study finds.
Yorkdale topped the list for the third consecutive year with $1,905 sales per square foot, a 15 per cent increase year-over-year which solidifies its position as one of the top malls in North America. At this rate, it’s on pace to surpass $2 billion in overall sales.
“That’s a tremendous milestone,” said Patterson.
Vancouver shopping centres ranked second and third. CF Pacific Centre moved up to second (from third) netting a healthy 10 per cent increase to $1,690 in sales per square foot, while the Oakridge Centre slipped to third at $1,594. CF Toronto Eaton Centre took fourth place with $1,556 in sales per square foot. Edmonton’s Southgate Centre rounded out the top five at $1,128 in sales per square foot, the only mall among the top five to see a slight decline, from $1,147 in 2017.
Square One grabbed the sixth spot with $1,086.78 in sales per square foot. It hit the $1 billion mark in sales from May 2016 to May 2017, making it the second shopping centre in Canada to achieve this milestone— after Yorkdale.
Square One is likely to continue growing; it is creating a 40,000-square-foot Food District slated to open April 1, bringing 22 new businesses in to the centre. Toronto hotspots La Carnita and Sweet Jesus are among the newcomers, along with The Pie Commission, Chocollata Gourmet, Blackjack BBQ, Craft Chippery and others.
Rounding out the Top 10 are:
7) Calgary’s Chinook Centre, $1,081 in sales per square foot;
8) CF Richmond Centre in Richmond, B.C., $1,060 in sales per square foot;
9) Metropolis at Metrotown in Burnaby, B.C., $1,040 in sales per square foot;
10) Ottawa’s downtown CF Rideau Centre, $1,017 in sales per square foot.
Newcomer for 2019?
Next year there is likely to be at least one newcomer to the list: Toronto Premium Outlets in Halton Hills, just west of Mississauga along Hwy. 401. It’s owned by Simon Property Group and “is actually over $1,200 (in sales) per square foot,” said Patterson. A massive expansion at the Outlets wrapped up in November, so it isn’t included in the 2018 study.
Toronto Premium Outlets now houses Gucci, Montblanc, Prada and Zadig et Voltaire alongside Burberry, Hugo Boss, Jimmy Choo, Stuart Weitzman, Ted Baker, and Canadian retailer Aritzia.
These off-price retailers, “they’re able to do really, really well,” Patterson said, by “pulling people in with value prices. That’s one way of doing it.”
Other notable trends in the study find that while the loss of Sears Canada stores in some malls may have led to a temporary reduction in visitor count and revenue, the majority of landlords are successfully strategizing to repurpose those vacant spaces.
Canadian shopping centres are, on average, also more productive than those in the United States and continue to see year-over-year gains while U.S. centres see moderate declines. The United States has considerably more retail space than Canada per capita, according to the report, and Canadians appear to be embracing brick and mortar retail moreso than Americans, who are increasingly purchasing online.
“More people are going to the mall,” said Patterson.