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All is not well in merchandising mall land. As the Globe and Mail reports  the Quebec “caisse de depot et placement du Quebec” has a real estate arm named  Ivanhoé Cambridge.  This real estate arm is attempting to sell their shares of  three Canadian malls that are  expected to sell for one billion dollars each. Ivanhoe Cambridge also owns the newly minted 1.2 million square foot Tsawwassen Mills Mall (with 6,000 parking spaces)  built on class one agricultural land in Delta, away from supportive customer density and without good transit connections.
Ivanhoe Cambridge owns half of the three malls they are selling-Cadillac Fairview owns the other half. Coincidentally, Cadillac Fairview is the real estate branch of the Ontario’s Teachers’ Pension Plan, while the Quebec owned Ivanhoe Cambridge is controlled largely by a group of Quebec governmental pension plans. The three malls on the block include Fairview Mall in Toronto, Market Mall in Calgary and Richmond Centre in Richmond, B.C.
These commercial mall real estate services are quite secretive, and Ivanhoe Cambridge is no different. Telling the Globe and Mail  “We don’t comment on rumours about our investment strategy”  speaks volumes about the roller coaster ride occurring in shopping centre retail. Sears Canada is closing, Toys R Us is under creditor protection, and Hudson’s Bay Co. is selling store space to an office sharing company called WeWork as reported in this Price Tags Vancouver post.
These three jointly held malls “generate around $900 in sales per square foot, according to the Retail Council of Canada. “The top malls are in great locations and will always do well,” said Alex Arifuzzaman, a retail real estate adviser with InterStratics Consultants. Compare those figures with those of Tsawwassen Mills Mall which is making $275 per commercial retail unit square foot.
Ivanhoe Cambridge is getting rid of shared assets in their portfolio, perhaps after the nasty spat also reported in Price Tags with Sears Canada in Metrotown. In that case, Sears wanted to go ahead with a mixed use development on their portion of the Metrotown site, but was required to give notice of their intent and could not close the store for 150 days. Ivanhoe Cambridge was forced to disclose that they were also looking at “redevelopment options”.  Certainly by getting rid of pesky co-ownership  allows Ivanhoe Cambridge to develop their own plans unfettered by partners. As the Globe and Mail article observes “According to its most recent activity report, Ivanhoé said it is redeveloping and expanding three other shopping centres in Quebec and British Columbia. The company said it would continue to “increase the value” of its shopping centres and “capitalize on development opportunities.”Over all, Ivanhoé said it planned to “significantly increase the proportion of growth market investments in its overall portfolio, with the goal of diversifying its markets and asset base.”
Is there a future in big mall retail with on-line shopping and the return to downtown shopping? What will Ivanhoe Cambridge’s next steps be with Tsawwassen Mills Mall?
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Comments

  1. Add to the list that Ivanhoe Cambridge recently sold the soon-to-be-redeveloped Oakridge Centre to QuadReal. QuadReal is the real estate arm of bcIMC.
    https://www.quadreal.com/quadreal-property-group-enters-agreement-to-purchase-oakridge-centre/
    QuadReal has revealed a new futuristic / steamlined design for the redevelopment of Oakridge (presumably ditching Henriquez in the process):
    http://urbanyvr.com/oakridge-centre-redevelopment-quadreal
    Ivanhoe Cambridge owns enough shopping centres in Metro Vancouver that maybe they have room to cash-out (?)
    Ivanhoe Cambridge will still own Metropolis at Metrotown, Guildford Town Centre and Tsawwassen Mills after it sells its interest in Richmond Centre.
    Richmond Centre is also going to be redeveloped (in part why the Sears space there has remained empty so long (no long term tenant allowed)).
    Really curious why the Target space at Metropolis at Metrotown has been vacant so long without any tenant announcement. That mall is in order for a reorganization, as it’s a bit of a dog’s breakfast in terms of tenants and their distribution (i.e. with the most successful malls going higher end (like Oxford’s Yorkdale in Toronto)) Metropolis has no high end wing and the relatively new food court has been plunked down in the middle of the only wing that could logically become high end (far away from Real Canadian Superstore, T&T Supermarket and the theatre entertainment wing).

  2. Whenever I find myself shopping in a mall, any mall, it always feels like I am in a ghost town.
    This includes Metrotown, Guildford, Tsawwassen Mills, Oakridge, Pacific Centre, and Bellis Fair.
    If malls are not able to reinvent themselves, we will continue to see their rapid decline.
    I’ll just throw this out there. Make your mall experience 1/2 retail, 1/4 market housing, 1/4 seniors housing, and include somewhere in between a very attractive natural oasis, part of the public space realm.
    But what do I know.

  3. One of the problems with malls is that many shoppers want discounted prices, and your average mall store isn’t attractive unless it has a big sale.
    When was the last time you bought anything at regular price?
    It can probably be endlessly analyzed, but there are many different market segments – and trying to be all things to all people really doesn’t work these days.
    Ambience, shopping environment and service appeal to the affluent shopper – in Vancouver Holt Renfrew and other high end stores thrive off the Asian tourist trade, not locals. It’s no secret that you pay extra for service and frills.
    Discount shoppers – off-price stores like Winners and Homesense also thrive. Costco which is jam-packed with zero ambience other than the free food samples).
    If you have a mall, who should you appeal to?
    That’s why many malls have moved either up-market or down-market or sectioned themselves into areas with higher end or lower end stores (i.e. you don’t have to walk the entire mall, just your preferred section / wing / neighbourhood).

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