Montreal's Ste. Catherine St thriving with growth in online shopping

Despite its high rents, high taxes, parking woes and potholes, retailers still have to be on Montreal's Ste. Catherine St, says a real estate executive who has several prominent tenants along the city's main shopping street.
“I would rather spend $100 on (rent on) Ste. Catherine than $35 in a mall in the outskirts,” says Gaby Bitton, president and CEO of Real Estate Groupe Lotus, which has tenants like Apple Store and Banana Republic on the street.
Sales per square foot on Ste. Catherine St. are much higher than they are for shopping centres in the suburbs, he says. As well, rents on the street are lower than comparable streets in downtown Toronto and Vancouver.
Bitton was one of the speakers at a session on the attractiveness of the Montreal retail market to investors, developers and tenants, which was held during the Montreal Real Estate Forum earlier this month.

Ste. Catherines St., Montreal, image from Wikipedia
Retailers favour Montreal's most famous street
The Ste. Catherine corridor St. is expanding and is increasingly in demand among American and European retailers, especially for their flagship stores, he says.
Consumers continue to come downtown and “retailers will pay more for the excitement” of being there, agrees Julie Martineau, vice-president, leasing, eastern region of Ivanhoe Cambridge, which has several downtown malls, including Place Montreal Trust and Eaton Centre in its portfolio.
However, to keep people coming to shopping malls, operators will have to ensure they create experiences in their fashion selections and food courts and provide distinct feelings for each property to get people to come.
Session moderator Michal Kuzmicki, managing partner of Brookfield Financial Real Estate Group, notes that Quebec lags behind the national average in area of shopping spaces per capita and that all major retail development in the province is occurring off the island of Montreal.
Still, Quebec retail sales are higher per capita than those of Ontario and held up better than the Canadian average during the recession of 2008-09.

Ste. Catherines St., Montreal in the summer
Competition is a 'bloodbath'
On the negative side, lease negotiations with American retailers are increasingly difficult and it is becoming more challenging to close a deal, Martineau says. “I don’t see the returns in some of the deals.” Competition, she says, “is ferocious in every aspect. It’s a bloodbath out there.”
As well, American retailers are getting tougher and commanding more power, and there are fewer retailers as a result of mergers and takeovers, Bitton says.
To an increasing extent, Canadian retailers are being pushed aside from prime spaces in malls in favour of American retailers, he says. “It’s not doing us any favours. Canada is becoming America.”
In addition, Bittons says Forever 21, Zara. H&M are becoming real powerhouses and “these guys are going to be leading the way.”
When it comes to leading, downtown is no longer doing so for taxes, speakers noted. “It’s no longer just a downtown problem,” says Martineau. “We’re often surprised at how much municipalities are raising taxes.”
Future strong for bricks and mortar
Speakers at the session also expressed confidence in brick and mortar retailing despite the increase of online sales.
Online shopping is a major trend that is driving format changes among retailers, says Greg Menzies, vice-president, eastern Canada of First Capital Realty. But the shopping centre is really a distribution centre in the middle of a neighbourhood, and it will still be needed even if everybody shops online, he says.
Michael Zakuta, president and CEO of Plazacorp Retail Properties, recounts how people told him at an International Council of Shopping Centers (ICSC) event in Las Vegas 10 years ago that “you’re finished. We’ll never buy your shares.” Years later, however, they asked with regret: “Why didn’t we buy your shares?”
Consumers are “losing the human experience,” thanks to the popularity of sites like Facebook, Martineau says. “Shopping allows you to regain it.”
What’s more, women are not going to buy jeans on the Internet in large numbers, she maintains. “We want to touch a sweater. We want to feel the tomatoes.”


Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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Ann launched RENX in 2001 as a part-time venture and has grown the publication to become a primary source of online news for the Canadian real estate industry. Prior to…

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