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"CRE Matters" Columnists

Synthia Kloot Senior Vice President, Operations, Colliers International
Oliver Tighe Executive Managing Director, Commercial Appraisal Group, Colliers
Tanya Nicholson Director, Marketing, Landlord and Investment Sales, Colliers International
Madeleine Nicholls Managing Director, GTA, Colliers
David Bowden Vice Chairman, Head of Strategy and Consulting, Colliers Canada
Scott Bowden Head of Valuation & Advisory Services, Colliers Canada
Sarah Bramley and Amy Vuong Colliers International
Brendan Neeson Executive Director of Property Tax Services, Alberta, Colliers International
Peter Garrigan Senior Managing Director, Colliers’ Industrial Practice Group, GTA
Lex Perry Vice President, Marketing, Communications and Research, Colliers Canada
Colliers National Multifamily Team, East, Colliers Colliers National Multifamily Team, East
Karl Innannen Managing Director, Broker, Colliers, Kitchener
Shiri Rosenberg Director of Asset Strategy, Innovation and Community Spaces, Colliers
Colin Alves & Jean-Marc Dube Colliers Toronto & Montreal
Janina Franceschutti Executive V-P, National Investment Services, Colliers Canada
Eric Horvath, CCIM Senior Vice President & Partner, Colliers
Adam Grisack Director, Valuation & Advisory Services, Colliers Canada
Eliezer Timolien Senior Research Analyst, Colliers
Robyn Baxter Senior Vice President & Co-Managing Director, Workplace Advisory, Colliers Canada
Arnold Fox Senior Vice President, Real Estate Broker, Montreal, Colliers
Alam Pirani Executive Managing Director, Colliers Hotels
Sarah Bramley Associate Vice President, Workplace Strategy & Innovation, Colliers
Bill Hennessey Managing Director, Moncton Brokerage, Colliers
Greg Taylor Managing Director, Halifax Brokerage, Colliers
Dayma Itamunoala Associate Vice President, Sales Representative, Toronto Brokerage, Colliers
Grant Evans Senior Vice President, Victoria Brokerage, Colliers
Lilian Kan Director, Development Management, Colliers Strategy & Consulting, Vancouver
Bonita Craig & Robyn Baxter Colliers Canada
Daniel Holmes President, Brokerage Services | Canada, Colliers
Sehaj Gill Associate Director, Property Tax Services, Colliers
Jane Domenico Senior Vice-President & National Lead, Retail Services
Robin McLuskie Managing Director, Canadian Hotel Brokerage, Colliers
Douglas Pulver Executive Managing Director, Colliers Vancouver
Tonya Lagrasta Head of ESG, Colliers Real Estate Management Services Canada
Susan Thompson Associate Director of Research, Colliers Vancouver
Pat Phillips Senior Vice President, Colliers Vancouver Brokerage
Rob Purdy Executive Director, Colliers Canada’s Valuation and Advisory Services
Rob Newman Senior Director of Property Tax Services, Colliers
Adam Jacobs Senior National Director, Research, Colliers Canada
Darrell Hurst Darrell Hurst, Senior Managing Director, Brokerage, Colliers
Jean-Marc Dubé and Arnold Fox Colliers Montreal
Robert Brazzell Managing Director, Ontario Property Tax Services, Colliers Canada
Damian Bernacik Director, Legal Services, Property Tax Services

Recent

Thinking beyond retail: B malls ripe for redevelopment as community hubs

Canadians need more motivation than ever to leave their homes, to visit stores and to spend their...

Canadians need more motivation than ever to leave their homes, to visit stores and to spend their money. 

The opinion, however, that retail in Canada is dying has been debunked. Retail is stronger than you think and retail will never die; it will just continue to evolve.

In some cases, bricks-and-mortar retail is stronger than ever. In others, it’s sagging and getting tired. 

That truth also applies to the shopping centres in which retail stores reside. Some are doing excellently, some well, and some are in need of a major overhaul or development. 

Consumers no longer need to visit a physical space to shop, causing retailers to re-evaluate their need for a physical location, and malls that were once flourishing can eventually lose their appeal to customers.

These malls often sit on valuable land in great locations and no longer represent the best use of the site from both a real estate and community perspective. 

There is an opportunity for developers to transform aging, tired malls into mixed-use developments that can bring a new dynamic, exciting amenities, entertainment, services and more functional improvements, to the community.

The malls that represent the greatest opportunities for such transformation are what one might call “B malls.”

These are typically located in residential or suburban areas and are less likely to be anchored by high-end fashion or leading retail brands than their counterparts in major metropolitan centres.

Shifting consumer habits change retail landscape

COVID-19 brought with it many societal shifts affecting everything from public health policies to consumer behaviour.

Retail e-commerce, for example, got a major boost at the start of the pandemic, when lockdowns forced many Canadians to shop online more than they had ever done previously.

Statistics Canada reported retail e-commerce sales reached a record $3.9 billion in May 2020, a 2.3 per cent increase over the month before and a 99.3 per cent increase over the pre-pandemic month of February.

A year-over-year comparison showed e-commerce sales had more than doubled in May 2020, with a 110.8 per cent increase.

These are impressive numbers and e-commerce certainly isn’t going away anytime in the near future. But the fact is that as soon as Canadians were allowed to return to in-person shopping at brick-and-mortar stores and malls, they did so in droves.

In marketing parlance, modern shoppers have become “omnichannel” consumers and some retailers are beginning to experiment with taking a high-tech approach to meeting their needs, incorporating artificial intelligence and augmented reality into the in-store experience.

The malls themselves are undergoing their very own shifts, with redevelopment underway at shopping centres all across the country, turning them from retail hubs into mixed-use communities.

However, retail and services will still play a large role in the rebirth of B malls.

With the increased population density that comes along with more residential units, establishments such as supermarkets, pharmacies and banks will still be drawn to these locations to serve the everyday needs of the people in the community.

Priming B malls for redevelopment is a win for everyone

The owners of a large strip mall on the Island of Montreal provide us with a lesson in how to do this right.

The shopping centre, with a food anchor and an office component, is situated in a prime location close to transit.

The vendors did their homework and got the zoning changed, allowing them to add over two million square feet of residential density to the site.

They wisely included redevelopment and demolition clauses in almost every single lease, which empowered the purchaser to begin redevelopment immediately without having to contend with the tenants.

It’s one thing to have the appropriate zoning in place for increased density, but that’s not worth much if you’re dealing with leases that prevent you from doing anything about it for 10 to 15 years.

When done right, the redevelopment of underperforming malls can be a win for everyone, from the owners to the retail tenants.

The biggest winners, though, are arguably the residents of the community, who gain much-needed amenities and services along with their shopping and dining experiences, all located at their doorstep.

It’s an appealing concept — and not just for  developers and investors.

According to the Retail Council of Canada’s most recent Shopping Centre Study (published in the pre-COVID days of early 2020), 87 per cent of Canadian adults said they would consider residing in “live, work, shop, play” environments.

“It is clear shopping centre owners are listening carefully to consumers’ desire for easier access, more simplicity, greater convenience and fabulous shopping experiences,” the study says.

“Landlords are not only investing in superb shopping spaces, they are increasingly also adding more non-retail amenities such as destination entertainment attractions, food markets and restaurants, fitness centres, parks, offices and residential towers that are transforming their shopping centres into all-encompassing community hubs.”

Today’s B mall could very well be tomorrow’s Grade-A destination.



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