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Retail Rents in Canada Rising Despite Economic Headwinds [Report/Interview]

By
Mario Toneguzzi
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110 Bloor Construction (Image: Dustin Fuhs)

The Canadian retail sector is seeing momentum continue to build, with most markets achieving stability after a couple of challenging years and retail activity on the rise, says a new report by commercial real estate firm CBRE.

There was an upswing in retail market fundamentals in the second half of 2022 compared to the first half, with 24 retail rent increases in key shopping nodes across the country and only three reductions on benchmark rent prices, according to CBRE’s H2 2022 Retail Rent Survey, a snapshot of retail trends and rents for 10 Canadian cities in the second half of last year.

Alex Edmison

“Despite economic headwinds, retail and retailer sentiment remains positive across Canada” said Alex Edmison, CBRE Senior Vice President with the urban retail team. “With an array of new retail developments cropping up across Canada, the stage is being set for a robust 2023.

“I would say the sentiment out there it’s generally positive. There’s a lot of talk of a recession. But in my day to day business I wouldn’t say I’ve seen much evidence of it.”

Leased 361 Queen Street West (Image: Dustin Fuhs)

Edmison said he has spoken with other real estate professionals on the CBRE retail team and in general business is really good.

“We could do with less inflation. We could do with everyone just not mentioning recession ever again and we could do with interest rates being lower but aside from that the fundamentals for a landlord or even a tenant they’re pretty good,” he said.

“It’s a tight market which we particularly see in the suburbs. That shows health. It would be a little less tight if people could build but what we hear is construction costs are prohibitive and it restricts supply.

“And generally sales are okay. I think there’s a retrenchment to bricks and mortar. Online is never going away. It’s only going to become more advanced and ever increasingly important if not an absolutely essential component of any tenant’s business.”

Here are some key takeaways from the Retail Rent Survey by CBRE:

  • Open-air centres reign supreme. Power, community (unenclosed), and neighbourhood centres saw increased rental rates in four of 10 Canadian cities. Demand remains strong for space in these formats, especially if grocery or food anchored. Edmison said “it’s just bread and butter, no pun intended . . . If you’re looking for certainty, if you just put bodies in a location they tend to spend money. So that’s what grocery stores do. It’s just incredibly simple. They just continuously, tried, tested and true, draw bodies.”;
  • Western provinces had the most widespread retail rent appreciation. All cities west of Winnipeg reported multiple retail rent increases. Saskatoon and Vancouver led the way here, with both markets seeing increasing rates in six retail formats or key urban areas; and
  • Construction costs and higher interest rates are impacting leasing. Tenants and landlords are working together to get deals done despite inflationary cost challenges. There is high demand for second-generation space or units with an existing build-out in place. But inventory is limited and good space leases quickly.
Canada Retail Rent Survey H2 2022 (Click to Download the Survey)

The CBRE outlined the following notable retail projects in major Canadian centres to watch for this year:

  • In Vancouver, The Post downtown and the expansion of Willowbrook Mall in Langley have generated significant leasing traction;
  • Edmonton’s ICE District is seeing excitement and pedestrian traffic grow with the openings of Loblaws City Market, The Banquet and Canadian Ice House restaurants;
  • The latest phases of Saskatoon’s newest and most prominent retail developments, Brighton Marketplace and Meadows Market, are both nearly fully leased. New phases are expected to start soon;
  • In Winnipeg, The Refinery District and Polaris Place are creating new neighbourhoods with promising retail in some of the city’s fastest-growing areas;
  • Toronto has seen a burst of activity among luxury tenants inking deals for space along Bloor Street. The Well, a transformative development, opens later this year and its retail space is 80 per cent pre-leased;
  • Ottawa’s retail development pipeline is the most active it has been in years. Excitement is building around the sale of the Senators and the associated future of LeBreton Flats; and
  • In Halifax, mixed-use developments are transforming the downtown core. Richmond Yards, the city’s largest mixed-use development, is creating a new community and opportunities for retailers to expand.
The Post at Homer St and W Hastings St (Image: Lee Rivett)

The CBRE report also highlighted the most active retailers and growing segments for 2023:

  • In the Grocery segment, concepts like Farm Boy and ethnic grocers including Oceans are expanding throughout Ontario. Meanwhile larger national brands have begun downsizing and reducing their home goods offerings;
  • In the Food segment, Quick Service Retail (QSR) activity has remained strong and is benefitting from less competition against cannabis users for prime space. Freestanding pads with drive-thrus are still in high demand but are difficult to find in urban areas;
  • The Service/Medical sector has seen significant growth from non-traditional users such as fertility, medical spas, and plastic surgery clinics. The introduction of these minor elective surgery clinics has offloaded hospital demand and is a boon to centres, as they typically occupy non-primary locations; and
  • The Digitally Native segment is also growing, in brick and mortar, online and through other channels. Brands like Mejuri, Allbirds and the recently converted Monos are paving the way for more groups to understand that brick and mortar is an important part of the retail ecosystem.

Edmison described the mood of the retail sector as “cautious optimism.”

“There is a desire by strong tenants to grow and they will do that,” he said. 

CBRE Limited at 145 King Street W (Image: Dustin Fuhs)

The Executive Summary of the CBRE report said:

“The Canadian retail landscape continued to build momentum in the latter half of the year with markets noting stability and increased levels of activity. Asking rents have appreciated in response to a combination of demand, limited supply, and elevated construction costs.

“Focus across Canada has remained on construction cost challenges and higher interest rates. Together, this has put a spotlight on demand for second-generation space or units with existing buildout in place. With limited inventory, however, good real estate is being leased quickly. National and international brands have been active across Canada in a broad range of sectors including a noted resurgence of luxury brands in urban, high-profile destinations.

“More market movements were reported as of H2 when compared to H1 with 24 noted increases and only three reductions on benchmark rent prices. Geographically, the majority of the increases were seen in western provinces.”

What’s The Future Of Brick And Mortar Retail in North America? [Interview]

By
Mario Toneguzzi
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Louis Vuitton Madison Avenue (Image: Louis Vuitton)

Following the COVID-19 pandemic and the rise of e-commerce, many have wondered how brick-and-mortar retailers will evolve and continue to appeal to consumers. 

Despite several retailers having to close their doors, Forrester Research estimated that through 2023, 72 per cent of retail sales will occur in physical store locations, and store openings in 2021 were twice the number of store closures. 

Given the forecast, how has brick-and-mortar retail evolved in the last year and what challenges may it still face from online shopping? 

“I feel that retail is not dead, it is evolving. Pop ups offering experiences such as Louis Vuitton taking over the old Barneys on Madison Ave was a huge hit and resulted in retail shopping in the boutique conveniently situated near the exhibit entrance and exit. The immersive experience of these pop ups are intoxicating and a draw to locals and tourists. As a result of our technological advancements the retail industry has readjusted its focus to the customer experience,” said Rena Kliot, Broker and Founder of Pulse International Realty in the U.S.

In this video interview Kliot,  discusses the current state of the retail industry in North America.

Kliot talks about the future of brick and mortar retail, how the sector has come out of the pandemic, key trends she’s seeing, international retailers looking to open stores in North America, the appeal of the North American market to international retailers and how inflation is impacting retail today.

The Video Interview Series by Retail Insider is available on YouTube.

Connect with Mario Toneguzzi, a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and the only Canadian – to learn how you can tell your story, share your message and amplify it to a wide audience. He is Senior News Editor with Retail Insider and owner of Mario Toneguzzi Communications Inc. and can be reached at mdtoneguzzi@gmail.com.

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Ray-Ban to Enter Edmonton Market with 1st Store

By
Craig Patterson
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Image: Ray-Ban

Sources say that upscale sunglasses and eyewear brand Ray-Ban will be opening a storefront this year at West Edmonton Mall in Edmonton. It will be the fourth standalone store for the brand after it opened locations during the pandemic in Toronto and Vancouver. 

The West Edmonton Mall Ray-Ban will replace Icebreaker Merino Wool which has operated a 2,900 square foot storefront in the mall for several years. The second level location is between Browns Shoes and Hollister and is across from an Apple store. 

West Edmonton Mall will be the fourth store in Canada for Rayban. The first opened in September of 2020 at CF Toronto Eaton Centre in downtown Toronto. A second opened in the fall of 2021 at the Yorkdale Shopping Centre in Toronto and a third most recently opened at CF Pacific Centre in Vancouver. 

Click image for interactive West Edmonton Mall map
Ray-Ban at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Ray-Ban at CF Toronto Eaton Centre (Image: Dustin Fuhs)

More Rayban locations are expected in Canada. It appears that the store strategy includes top enclosed shopping centres, which means malls such as CF Chinook Centre in Calgary and CF Rideau Centre in Ottawa could be targets. 

Ray-Ban is also carried in Canada at multi-brand retailers. That includes Sunglass Hut, Hakim Optical, Sport Chek, Pearle Vision, LensCrafters, and other chains — not to mention a wide range of independent retailers specializing in optical goods. Ray-Ban’s direct-to-consumer move into standalone stores as well as a transactional Canadian website is a trend being seen by many other brands, some of which are pulling out of multi-brand retailers to open corporate stores. 

Given the limited number of corporate standalone Ray-Ban stores in the United States, multi-brand retailers are likely to be an important sales channel for Ray-Ban in Canada for years to come.

Image: Ray-Ban
Ray-Ban at Yorkdale Shopping Centre (Image: Dustin Fuhs)

Ray-Ban is headquartered in Milan Italy, though it was founded in the United States. In 1929, US Army Air Corps Colonel John A. Macready worked with Rochester NY-based medical equipment manufacturer Bausch & Lomb to create aviation sunglasses optimized for pilots. In 1936, anti-glare lenses were introduced and in 1938, the company created impact-resistant lenses which were redesigned with metal frames for the patented Ray-Ban Aviator. Other styles were released in subsequent decades including the ‘Olympian’ which was worn by Peter Fonda in the 1969 film Easy Rider. In 1999, Milan-based Luxottica Group acquired Bausch & Lomb’s Global Eyewear Division for US$640 million.

Loblaw’s PR Response to Consumer Criticism Shows it Prioritizes Profit Over People [Op-Ed]

By
Retail Insider
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Loblaws at 10 Jarvis Street in Toronto (Image: Dustin Fuhs)

Loblaw Companies made headlines in October 2022 for freezing the prices on one of its in-store brands in the face of record food inflation. When the promotion finally ended on Jan. 31, consumers responded negatively to the announcement.

In response to consumer criticism, Loblaw took to social media to defend itself. The result was an embarrassing communications display from one of Canada’s biggest companies.

The disastrous end presents a useful opportunity for Canadians to recognize how companies attempt to manage public perception of a brand through times of crisis and instability.

The communications failure should spur Canadians to pressure Loblaw — a company that controls our access to food and, increasingly, health care — to worry about the material effects of its actions, not just its words.

A successful campaign launch

The rollout of a marketing campaign like Loblaw’s involves anticipating how the competition, press and public will react. Public letters, Twitter threads, ads and in-store promotional materials are all strategic tools an organization uses to land the most advantageous media coverage possible. Plans are made for both launching and wrapping up the campaign.

In October, Loblaw announced its price freeze through a letter sent to its rewards program members from chair and president Galen Weston. The letter argued that food price increases were out of control and Loblaw would freeze the price of its No Name brand items to help Canadians.

The Canadian media ran several stories that echoed the letter almost beat-for-beat. This was a messaging success. News coverage stayed on Loblaw’s message, even as competitors pointed out that seasonal price freezes were routine in the grocery industry.

Nonetheless, thanks to a savvy management campaign — including in-store ads — Loblaw managed to capture good press by advertising a common industry practice as a form of charity.

On Twitter, some contested Loblaw’s claim that rising prices were out of its control by pointing to the shockingly high quarterly earnings the company had announced to its shareholders in November 2022. Its most recent quarterly profits were also very high, surpassing analysts’ expectations: $529 million, 10 per cent more than the same period last year.

This narrative echoes the public response to the company ending its Hero Pay benefits in 2020 despite record profits during quarantine.

Playing the social media game

The ending of such a marketing campaign is just as important as the launch. Loblaw’s three-month-long prize freeze ended on the last day of January, prompting backlash online from consumers.

Loblaw’s social media team took an unusual approach to handling this criticism: responding directly.

Communications strategies succeed when they are well-messaged and highly controlled. Tweets are not an inherently bad choice when it comes to handling criticism on social media; if a company’s responses are factual and well-crafted, interactions will likely stay confined to online platforms. But if responses contain outlandish claims, tweets can blow up and escape into broader public discourse.

Loblaw’s recent Twitter responses fall into this second category. In a particularly cringe-worthy series of replies, the company claimed it had become “the face of food inflation” through no fault of its own. Echoing the October 2022 letter, Loblaw argued that the real culprit was cost increases along its supply chain.

In another tweet, the company suggested that it was too easy to blame grocers for high prices. It suggested that Loblaw’s grocery stores earned just a $4 profit on every $100 of groceries sold.

Bad communications strategy assumes the reader is stupid. The tweet was particularly painful because it was easy to see through the argument: Loblaw owns much of its own supply chain.

The grocery store stocks its shelves with private label brands — Blue Menu, President’s Choice and of course No Name brand — that it owns and prioritizes in its marketing, merchandising and retailing placement. This is public knowledge among Canadians because Loblaw’s, No Name and the President’s Choice brands all share the same spokesperson: Galen Weston.

As food marketing analyst Richard Baker recently pointed out, 44 per cent of all branded goods sales at Loblaw’s come from its own brands. This allows the company to cut a profit long before its products ever land in the aisles of its own retail stores. The $4 profit generated at the checkout counter represents only a fraction of the money such a large corporation makes.

Laying the blame elsewhere

The tweets were criticized by social media users, politicians and the press alike. They tell us much about how an organization like Loblaw weighs its actions against its public perception.

An image-first approach to communications runs the risk of producing a kind of myopia where a company’s leadership begins to assume that every problem it faces is the result of external perception, rather than its own actions.

In the long term, this kind of thinking clouds good judgement. It convinces leadership they can do no wrong, that every problem has a communications solution, and that it is Canadians themselves who do not understand. This becomes especially dangerous when the company’s own executive is also their spokesperson.

Nowhere is this myopia more on display than Weston’s refusal to appear before a parliamentary committee to discuss food inflation in December 2022. Sending a chief financial officer to speak suggests the brand’s spokesperson is above the very people they claim to serve.

In February, the committee summoned grocery executives. On Feb. 17, the Toronto Star reported that Weston has agreed to appear before the committee to face questions about food prices if asked.

Brands don’t exist in a vacuum

In 1955, market researchers Burleigh Gardner and Sidney Levy argued that brands “do not grow in a vacuum.” Rather, they are continually shaped by the actions of organizations and ordinary people’s perceptions, for better or for worse.

In the modern digital media landscape, brands have become more easily scrutinized; their meanings are harder to manage and contain.

Today, brands like Loblaw require constant surveillance and maintenance to ensure the right feelings and narratives stick. Individual slip-ups might happen, but as Gardner and Levy argued nearly 70 years ago, “they all make their contributions, for good or for bad.”

Dissonance emerges when a company’s actions can’t be squared away against its words. Weston’s brand as a spokesperson might be friendly and affable, but his organization’s pricing strategies are anything but.

Canadians should be especially concerned about the lack of accountability and honest communications at Loblaw. The company acquired Shoppers Drug Mart in 2013, heavily invested in the virtual care company Maple in 2020 and acquired Lifemark Health Group in 2022. These moves signal to investors that offering medical services will be a key future growth area for the company.

Loblaw’s recent disastrous public communications make it plain that profits will be put ahead of people when it comes to health care as well.

The Conversation

By Dan Guadagnolo, Assistant Professor, Institute of Communication, Culture, Information and Technology, University of Toronto

This article is republished from The Conversation under a Creative Commons license. Read the original article.

CF Masonville Place in London Adding Several New Retailers in 2023 [Interview]

By
Mario Toneguzzi
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CF Masonville Place (Image: Cadillac Fairview)

It has been an exciting past year or so at CF Masonville Place in London, Ontario, as the shopping centre has introduced several new retailers.

And more is to come.

Most recent tenants have included Oak+Fort, Specsavers, Hillberg & Berk as well as an expansion of Bath & Body Works.

Sandra Lorentiu

“Also important to note, during COVID we had three great openings such as NIKE. NIKE opened right in the midst of COVID and they’ve done quite well since then. American Eagle expanded their footprint and lululemon as well too,” said Sandra Lorentiu, General Manager for CF Masonville Place.

“And we are excited to announce that Athleta will be coming to town, opening their first store in London in the summer of 2023.

“Cadillac Fairview does a great job at continually assessing the changing retail landscape. We listen to our consumers through our regular research that we do, as well as always looking to deliver on our promise of a heightened experience by offering a compelling mix of best in class retail, dining and entertainment. I think these retailers certainly add to that overall offering.”

Nike at CF Masonville Place (Image: Cadillac Fairview)
lululemon at CF Masonville Place (Image: Cadillac Fairview)
Aritzia at CF Masonville Place (Image: Cadillac Fairview)

The shopping centre has been around since 1985 and is just over 630,000 square feet over two storeys. The mall is located in the north end of London near the intersection of Fanshawe Park Road W and Richmond Street. 

“CF Masonville Place has been the leading shopping centre in southwestern Ontario,” said Lorentiu. “We service a vast trade area of upwards of 700,000 people serving as far west as Windsor, north to Sarnia and east to Kitchener-Waterloo.”

The sales per square footage at CF Masonville is $1,030.

Lorentiu described current occupancy at the mall as “very healthy” in the high 90s per cent.

“We have been very fortunate to see our sales increase from last year, as well as a lot of our categories are either meeting or exceeding their 2019 volume. I think that will just continue as our momentum and our traffic continue to increase,” she said. “Over the last three years, no doubt it’s been challenging. Cadillac Fairview has pivoted quickly to backfill some vacancies.

IKEA at CF Masonville Place (Image: Cadillac Fairview)

“Unfortunately we saw some poor performing clients shut their doors, but we’ve been quick to engage new concepts to backfill those vacancies to ensure the high occupancy. A great example of that is we introduced the IKEA Design Store in 2022, a first to Cadillac Fairview, which has resonated well with our clientele here in the market.

“I think it’s important for Cadillac Fairview, especially CF Masonville Place, to pride ourselves in not only welcoming international and national brands, but also welcoming a diverse mix of local entrepreneurs and businesses. A great example of that we have local entrepreneurs and restaurateurs such as The Green Window, Thaifoon, Happiness Cafe, that are new to our mix here in London. The Perfect Image, a tattoo and piercing location, which we probably would not have looked at pre-COVID, but has been a great new addition as well.”

Sport Chek at CF Masonville Place (Image: Cadillac Fairview)
Renovated Bath & Body Works at CF Masonville Place (Image: Cadillac Fairview)

Lorentiu said it’s important for shopping centres today to diversify their mix and make them more experiential for clients both for the retail and the overall dining and food offering.

“Fast food and specialty food volumes have increased exponentially since COVID and it’s important for us to make sure that we have a well-rounded mix. We have The Rec Room, which we introduced about four years ago which resonates well now.

“Happy to see SilverCity with all these blockbuster movies being launched and the foot traffic returning to the centre. So it’s the overall experience that we’re focusing on to grow our shopping centre.”

The Rec Room at CF Masonville Place (Image: Cadillac Fairview)

A trend today in shopping centres is to densify their sites by adding other commercial and residential use to under-utilized space. Cadillac Fairview and other real estate property owners in the country have launched initiatives in that regard in recent years. 

Will CF Masonville Place do so as well?

“We do have a densification application in with the City of London. We are currently working with them and are in active discussions,” said Lorentiu. “It will be a combination of multi-use and I think it’s a phased approach for us to ensure we are, within north London, the destination currently and adding densification with different services and uses that can better service the community.”

Additional Images from CF Masonville Place

CF Masonville Place (Image: Cadillac Fairview)
CF Masonville Place (Image: Cadillac Fairview)
Aritzia at CF Masonville Place (Image: Cadillac Fairview)
Nike at CF Masonville Place (Image: Cadillac Fairview)
CF Masonville Place (Image: Cadillac Fairview)

A Rise in in Alcohol Taxes at Retailers in Canada to Hit Consumers April 1 [Op-Ed]

By
Sylvain Charlebois
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Wine Rack in Niagara Falls, Ontario (Image: Dustin Fuhs)

Everything is more expensive these days at the grocery store. We’ve also seen increases at the liquor store, or wherever you purchase your favourite alcoholic beverages. Well, these products are about to get more expensive yet again.

In 2017, the federal government had the brilliant idea of indexing taxes on alcoholic beverages to align with inflation. It’s called an escalator tax on alcohol. The idea was to make hikes more predictable, but without any parliamentary oversight, or any consideration for changing market conditions. Despite concerns registered by our alcohol industry, Ottawa marched on. 

Before the pandemic, inflation was not as significant an issue as it is now. Few noticed that taxes on alcohol increase every year. But the shock will hit us this year, due to our very high inflation rate. So in a few weeks from now, on April 1, that tax will increase by 6.3 per cent, making it the highest increase ever. Canadians will have to pay an additional $125 million in taxes per year, starting April 1, when buying beer, wine and/or spirits. Canada already has the highest alcohol taxes amongst G7 countries. In fact, taxes alone account for around 50 per cent of the price of beer, 65 per cent of the price of wine, and 75 per cent of the price of spirits.  

We have seen five consecutive hikes since the escalator clause was implemented in 2017, which allowed Canada to surpass Japan with the highest tax rate on alcohol in the industrialized world. For anti-alcohol advocates, this may be seen as encouraging news. Making alcohol more financially prohibitive will get consumers to drink less. It makes perfect sense from a public health perspective, which is clearly what Ottawa is going after. Fiscal measures impacting alcohol consumption are nothing new, but Canada is now reaching a point where an entire industry can be negatively impacted by our government’s thirst for more tax dollars, no pun intended.

The market size for Canadian breweries will exceed $7.5 billion by the end of this year. Over 17,000 people work in the beer industry alone. We now have more than 1,200 breweries and microbreweries in the country, and many are operated by craft-brewers employing just a handful of employees. The wine industry contributes almost $12 billion to our economy at present. And of course, we have restaurants, pubs, and bars, which all rely on alcohol sales to make a living.

The food service industry is already hurting. According to Restaurant Canada, in 2022, in many provinces, for every restaurant opening, two establishments closed. And that trend is likely to continue into 2023. As a result, the ripple effect of increased prices on the alcoholic beverage industry is clearly measurable. Across Canada, sales of beer are down 3.6% over the last 12 months, according to Beer Canada.

Liquor boards will also be impacted by this. Gross profits for all liquor authorities and government revenue from sales of alcoholic beverages across the country now reach almost $10 billion per year, according to Statistics Canada. These sales are helping provinces fund hospitals, schools, roads, and other infrastructure they need to maintain.

What we learned from similar increases in tobacco tax is this: higher prices may lead to an increase in illicit activities, as consumers seek out cheaper alternatives. For alcohol, this means bootlegging and smuggling. This can have negative consequences on public health and safety, as illicitly produced alcohol may be of lower quality and pose greater risks to consumers. This is not the road we need to take, especially right now.

Some say the escalator tax, which few Canadians know about, is undemocratic. Perhaps, but the escalator tax will eventually make all legal alcohol products in Canada less affordable over time. Parliament should investigate the escalator tax and see whether we should cap it or at least set a ceiling clause of some sort when inflation reaches a certain level. Ottawa has already benefited from inflation, which is why the federal government’s deficit has simply melted down to about $4 billion in the last 8 months. Ottawa doesn’t need more revenue from “sin taxes.” Ottawa should protect our agri-food industry as much as it can, by making it attractive to investors while offering high-quality, decently priced food and beverage products to Canadian taxpayers. 

Or else, with higher taxes, many companies will flee Canada, eliminating options and reducing competition, thus pushing prices even higher.

(Data in Figure was provided by Beer Canada)

Toronto’s Corktown Seeing Retail Revival with New Developments [Interview]

By
Mario Toneguzzi
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Image: PARLIAMENT&CO / The Sher Corporation

A one-of-a-kind mixed-use building, PARLIAMENT&CO., is being developed in the up-and-coming Corktown neighbourhood of Toronto, adding 3,000 square feet of retail space to the market.

Shakeel Walji, Creative Director/President of The Sher Corporation which is developing the project, said the 11-storey building will have the retail space on the main level. Although it can be demised, the space is perfect for a hip local eatery or coffee hot spot.

“This project is unique in the sense it has four different components in an 11-storey building,” he said. “It has retail at grade which is a freehold unit and then we have a commercial condominium between levels two to five and then it has another condominium from levels six to 10 which are designated true live/work lofts and then on the 11th floor we have an event space that’s approximately over 6,000 square feet combining indoor and outdoor.

“So that’s an 11-storey building with four different uses all brought together in one building form.”

The site is located at Parliament Street and Queen Street East.

Image: PARLIAMENT&CO / The Sher Corporation

Sher started in 2007 with a development at King Street East with a 15-storey, 215-unit residential building. The company likes to develop midrise to highrise condominium projects on infill sites in “beautiful” neighbourhoods in Toronto. It has also ventured out recently into suburbs like Markham.

Walji said the retail component of the newest project fronts onto Parliament Street facing west and it also fronts onto the southside which is a laneway that runs east/west.

“The portion that’s fronting south onto the laneway is sort of a colonnade condition. There’s glazing. There’s glass surrounding the retail space,” he said. “There’s about 3,000 square feet of retail space that’s available for ownership.

“Ideally, we’d prefer one retailer because 3,000 square feet is not a lot. We’re thinking a beautiful boutique restaurant would be ideal. You can even do the trend now is to create something like a ghost kitchen producing different types of food products, serving purely as a delivery solution in today’s COVID world. 

“A nice high end restaurant would be ideal. A morning coffee place. That sort of idea.”

Image: PARLIAMENT&CO / The Sher Corporation
PARLIAMENT&CO / The Sher Corporation

Walji said Toronto, like other big urban centres, is going through gentrification and the intersection at Queen and Parliament has seen its share of gentrification in recent times.

“It’s one of those last corridors in the city that will be seeing significantly more. It’s been relatively left untouched,” he said. “There’s development to the south currently that combines office space, condominiums, retail with a large visitor parking component as well. That was really the first project that came along and if you go further south of that you’ve got a really cool vibe and neighbourhood.

“This is the lower East side Toronto’s furniture district and if you go further south you’re also hitting the Distillery District . . . That’s a really hot spot for visitors to Toronto and Canada who definitely want to go there. It’s like a cobblestone area with a lot of streets and a lot of retailers.

“Our development is about a 10-minute walk north along Parliament, just north of Queen Street and we’re anticipating more gentrification to the north of us. Recently I know the Catholic church has also bought a site at the corner. They’re thinking of having a Catholic school come in or a church being developed at that corner. The whole Regent Park re-gentrification is almost complete. All of that area is being re-gentrified with high-end condominiums, retail at grade, visible cities, wide boulevards, treescapes, urban realms being updated. So it’s going through a lot of gentrification.

“Seeing that happen on Parliament to the north and to the south, that’s how this site was picked. This site is literally in the middle and it’s probably one of the last sites along Parliament in that sort of stretch that will see development.”

Possession is expected in February 2024.

Vanessa Lynch of DWSV is the point of contact for any purchasing inquiries relating to PARLIAMENT&CO.

Canadian Retail News From Around The Web For February 22nd, 2023

By
Retail Insider
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Canadian Retail News From Around The Web

News at a Glance

Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.

Grocery prices unlikely to fall anytime soon, experts say (CTV)

These are the grocery items that saw the biggest price increases in January (CTV)

Canadian retail sales rose 0.5% to $62.1B in December (BNN / Canadian Press)

Joe Mimran looks to revive Tilley, and it’s not just about the hat (Globe & Mail / subscriber paywall)

Inflation in Canada slows to 5.9%, leaving room for rate pause (BNN)

Home Depot says it will raise pay for US, Canadian workers (Bay to Bay News)

Ontario company selling ‘odd’ or ‘ugly’ produce for huge discount launching in Toronto (CTV)

Tim Hortons franchisee in P.E.I. evicts tenants to make way for temporary foreign workers (CBC)

Paula’s Choice Is Coming To Sephora Canada (Style Democracy)

Vape stores selling candy to entice teens: Quebec anti-tobacco coalition (CTV)

Ghost Drops closes Toronto store after purchasing production facility (Stratcann)

New Horizon Mall Near Calgary Sees Occupancy Rise Following Bumpy Start 5 Years Ago [Interview]

By
Mario Toneguzzi
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Image: New Horizon Mall

As the unique New Horizon Mall approaches its fifth anniversary this spring, the shopping centre, just outside of Calgary city limits in Balzac, continues to increase its occupancy.

The mall, which was developed by Toronto-based Torgan Group, with its partner MPI Property Group, is about 320,000 square feet and is unique as it was Alberta’s first condo mall where space in the centre was initially sold to people and businesses as opposed to being leased. Many units were purchased then leased out to other businesses.

“It’s been active. It’s been interesting coming out of COVID, all of those fun things that everyone’s been dealing with,” said Bob Parsons, the GM of New Horizon Mall.

New Horizon Mall

“What’s been interesting over the past year at New Horizon, we’ve continued to add additional stores, additional tenant operators, additional unit owned operators. Over the last year, the architectural control committee has approved over 100 new stores. In the Calgary marketplace, we’re probably the most economical, feasible option for entrepreneurs, business incubators in terms of retail. I doubt you could find a more economical rental rate in the marketplace for retailers wanting to shop their wares so to speak to the consumers of this marketplace.

“We’re about a year and half into Sky Castle operating in the shopping centre, which has been a strong addition to the product and to the services offered here. They’ve done very well and understand their marketplace and understand who their customer is and the families I think have reacted and are pretty appreciative. So they’re doing well.”

Sky Castle, a massive entertainment centre and children’s indoor playground, is the shopping centre’s largest anchor tenant at about 34,000 square feet.

Sky Castle at New Horizon Mall (Image: Sky Castle)

“We’re continuing to whittle away at both the numbers in terms of raw store counts as well as occupancy based on square footage,” said Parsons. “It’s been good that way for sure.

“We’ve got over 200 stores that are fully fixtured and open on a regular basis. On a square foot basis, right now we’re about 60 per cent occupied. Both those numbers are up dramatically over the numbers as we headed into COVID and now as we’ve come out of COVID things are still moving in a positive direction.

“As every month goes by, we continue to add stores. As every month goes by, we hopefully become a little more predictable in terms of how our consumer perceives us. And hopefully we’re providing unique retail experiences for our consumer.”

Other major anchor tenants in the mall include Best Shop and Prairie Horizon Fresh Market.

C & L Collectables at New Horizon Mall (Image: New Horizon)
Elegance Mezon at New Horizon Mall

Construction of New Horizon Mall was completed by Ledcor Construction in 2018.

A condominium board was set up to run New Horizon Mall and to represent all unit owners. An onsite management team is employed by this board to manage day to day operations and headed by General Manager Bob Parsons.

“I think in general we’re seeing our traffic numbers increasing month over month. People are responding to events. There was the timeframe through COVID for sure people weren’t as positive about venturing out, but I think there’s certainly a portion of the population that’s been starved for the things we just took for granted – opportunities, craft fairs, events in the mall whether it be car displays different activities, Stampede events, that happen on a regular basis in this market,” said Parsons. 

Image: New Horizon Mall

“I think for sure our traffic numbers are showing month over month increases and we’re seeing specific events for sure are generating more traffic than what they would have in the past. I wouldn’t want to say we’re back to normal. I think COVID has changed a lot of experiences in everyday life but for the most part there’s more of an appreciation for things that go on that we took for granted and now people are accepting of them.

“One of the things with Sky Castle is we can track and predict strong traffic patterns and increases in the mall based on school holidays and stat holidays.”

Paris-Based Women’s Fashion Brand ‘Morgan de toi’ Looks to Expand into Canada with Stores [Interview]

By
Mario Toneguzzi
-
Photo: Morgan de toi

Morgan de toi, a Parisian women’s wear brand, has set its sights on expanding into the Canadian market. 

Marcel Rinaldy

Marcel Rinaldy, President of Groupe 3M, who will be the Canadian partner/developer of the brand, said Canada is recognized for entrepreneurship, world-class cultural talent, safe cities, excellent quality of life, which perfectly corresponds to the values ​​of the Morgan brand, sincerity, requirement, proximity, audacity, agility, coworking.

Rinaldy and his team are working with Montreal-based real estate firm Think Retail to expand the Morgan brand into Canada.

“For several decades, Morgan has been dressing women to make them feel attractive and powerful. The French brand was built from an identity fashion signature, without ever ceasing to evolve. Capturing the spirit of the times and creating novelty: these are Morgan’s values ​​for expressing its wardrobe. Morgan fashion accompanies the daily life of all city dwellers, by betting on cuts that sublimate the silhouette and accessories that boost the look,” said Rinaldy. 

Image: Morgan de Toi

He said the brand specializes in women’s clothing 25 to 45 years old, chic for every day and occasion.

There are 180 stores in France and 327 internationally.

“Morgan writes her love story with fashion by collaborating with influential women: Caroline Receveur, Georgia May Jagger and Iris Mittenaere have joined the adventure to make femininity shine throughout the world,” said Rinaldy.

“For several years, (Morgan has been) committed to structuring and developing its responsible business approach. Our desire is to offer a healthy and dynamic work environment to our employees, and to develop the best products while respecting our partners and the environment. Our social responsibility approach is based on four structuring commitments for the development and sustainability of our activities: offering responsible products and services that meet customer expectations; ensuring employees a fair and motivating working universe’ building and developing ethical partnerships; and controlling the environmental footprint.”

Image: Morgan de Toi

Tony Flanz, President of Think Retail, says the plan is to start with several stores in Quebec. Ideal spaces are 1,500 to 2,000 square feet in enclosed smalls and along high streets. The goal is to open several boutiques in Quebec in the next couple of years.

Tony Flanz

“Chic, playful, sensual—fashionistas will be excited to welcome Morgan de toi, a Parisian women’s wear brand to Canada,” says Think Retail in a post on its website. “Founded in 1968, the mid-price brand was acquired in 2019 and has since grown into a powerhouse with a strong global presence that includes a network of more than 1,000 points of sale—branded stores and shops-in-shops, both in France and around the globe. 

“The versatile retail brand targets urban women ages 25 to 45, with everyday chic that spans casual to work and dressy. The well-priced range includes t-shirts and sweaters, as well as dresses, trousers, skirts, outerwear, shoes and accessories.  The concept is perfectly captured by brand ambassador Iris Mittenaere, former Miss France and Miss Universe, who encapsulates French beauty and style. Her strong following and influence help keep the brand in the spotlight.

  • Image: Morgan de Toi
  • Image: Morgan de Toi

“In addition to great style, Morgan has substance, touting its commitments to sustainability, including a goal to use 100 per cent more sustainable cotton for its products. ‘More sustainable’ cotton includes cotton from farms, which are part of the Better Cotton Initiative, recycled cotton and organic cotton. This fits nicely with the values of its target demographic.

Over the years, Morgan has developed an international cult following for its French elegance with a modern twist. This is an ideal tenant, with a successful history and strong brand awareness.”

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