Mall construction boom fuelled by tastes of Canadas wealthiest

While big box retailers like Target have struggled to get a foothold in Canadian markets, demand for luxury retailers is strong and fuelling massive expansion projects at shopping malls across the country.

A construction crane towers over the expanding Sherway Gardens mall in Toronto on Friday, July 25. Photo by The Canadian Press

According to research by commercial real estate company CBRE Group, more luxury retailers are predicted to arrive in Canada, albeit at a more moderate pace compared to the flurry of activity seen in the last three years.

The aftermath of the 2008 financial crisis and recession spurred a boom in retail development with foreign retailers, primarily American ones, turning their sights to Canada and construction hasnt kept up with demand.

There is little to no vacancy in highly sought after shopping centres and neighbourhoods, according to CBREs head researcher Ross Moore.

We just dont have empty retail to speak of. Across the country malls are generally full. If youre a Spanish or Italian or U.S. retailer, you are going to be put off by that. Supply is the key. Until we build more thats going to be a challenge.

The study, which measured the number and type of retailers that set up shop in 2013, found that luxury and high-end fashion brands constitute the majority of new arrivals in Canada.

Newcomers in the jewellery, designer fashion and accessories categories are driving the demand for additional retail space.

In the cities, where most of Canadas top income earners reside, construction cranes are busy piecing together the new extensions: In Vancouver, the Pacific and Oakridge Centres are getting bigger (adding 578,000-square-feet and 373,000-square-feet respectively); Calgarys Chinook Centre is expanding (140,000-square-feet) as well as Ottawas Rideau Centre (230,000-square-feet).

In Toronto, top-tier malls Yorkdale and Sherway Gardens are simultaneously undergoing multi-million dollar expansions to accommodate new anchor tenant, the upscale U.S. department store Nordstrom.

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Mall construction boom fuelled by tastes of Canadas wealthiest