Despite the rise of ecommerce and some high-profile retail failures, Canada’s shopping malls are doing just fine, thank you very much.
In a new report, commercial real estate firm Avison Young said Toronto’s Yorkdale Shopping Centre was Canada’s most profitable mall in 2015, with $1,610 in sales per square foot. Vancouver’s CF Pacific Centre, which topped the list last year, is now at number two, with $1,599 in sales per square foot.
Canada’s top 10 performing malls had retail sales of at least $994 per square foot, according to the report, which uses information from several sources.
Rounding the lowest figure upward, the top 10 shopping centres “form an exclusive $1,000-per-square-foot club,” said Bill Argeropoulos, principal and practice leader, Research (Canada) at Avison Young.
“Obviously, the numbers don’t lie and these large shopping malls have performed very well,” said Argeropoulos. Part of the reason is that mall owners have invested hundreds of millions of dollars to renovate, expand or update their properties to attract new retailers.
CF Pacific Centre, for example, underwent two major expansions last year, including the opening of a 230,000-sq.-ft. Nordstrom flagship. Last September, CF Sherway Gardens opened its new 210,000-sq.-ft. wing, and Yorkdale Shopping Centre’s 298,000 sq.-ft. expansion is expected to be complete this fall.
“This investment has been going on for several years, even following the recession, so the retail landscape has been changing and adopting and I think has looked beyond the demise of Target,” said Argeropoulos.
Other factors driving the strong performance are the low Canadian dollar, which is discouraging Canadians from shopping in the U.S., as well as relatively low vacancy, controlled new supply, and solid population growth, according to the report.
The study shows British Columbia (6.6%) and Vancouver (9.9%) were the leading province and city in the country, respectively, for retail sales growth in 2015, followed by Ontario (4.5%) and Toronto (5.4%). However, oil-dependent Alberta will have the weakest outlook for retail sales in 2016, with Calgary and Edmonton expected to see declines of 2.3% and 2.2%, respectively, by the end of this year.
“It’s going to be take some time for those sales to rebound, but that’s basically like any other industry in Alberta,” said Argeropoulos “There will be a little bit of pain before they can return to average levels.”
TOP 10 SHOPPING MALLS
Here are the 10 malls that generated the highest sales per square foot in 2015:
- Yorkdale Shopping Centre, Toronto: $1,610
- CF Pacific Centre, Vancouver: $1,599
- Oakridge Centre, Vancouver: $1,537
- CF Toronto Eaton Centre: $1,509
- Southgate Centre, Edmonton: $1,215
- CF Chinook Centre, Calgary: $1,119
- Royal Bank Plaza, Toronto: $1,096
- CF Rideau Centre, Ottawa: $1,018
- Metropolis at Metrotown, Burnaby, B.C.: $1,008
- Square One in Mississauga: $994