Following the 2008 financial crash, RioCan Real Estate Investment Trust( REIT) began planning a mixed-use residential development from the 300,000-square-foot site of its Brentwood Village shopping centre in Calgary.
This year an upscale, 12-storey high-rise rental tower at the site, developed in a joint-venture with Boardwalk REIT, has opened with average rents of $1,779 per month while the shopping centre below struggles with the financial fallout of COVID-19.
In Metro Vancouver, major mall owners are also finding that real estate, not retail, may define their future.
Consumer traffic has climbed since sites started to reopen, and Vancouver-area shopping centre owners say that if they have not already welcomed new tenants, they are in talks to fill spaces that weak tenants have abandoned.
Challenges remain for even the most productive sites, however, prompting executives to push ahead with longtime plans for reinventing their real estate.
Shape Properties, Cadillac Fairview and QuadReal Property Group are among the shopping centre owners redeveloping premises, most with an emphasis on market housing.
Shape, for example, recently completed building two 60-storey residential towers with about 1,000 new homes at the Burnaby mall that it rebranded several years ago as the Amazing Brentwood.
The mall has a mix of dining, shopping and service businesses, with patio tables that dot entrances to plazas, while concerts, markets and celebrations are expected to be held when pandemic restrictions allow.
It is the real estate, however, that is a particular draw.
A third tower, with about 500 homes, is under construction, said Shape’s executive vice-president Darren Kwiatkowski
Condominium residents will be able to walk to the mall for all their necessities, while others can take advantage of free parking and the nearby SkyTrain Millennium Line.
Shape, which owns Highstreet Shopping Centre in Abbotsford, has one other large Metro Vancouver mall: Lougheed Town Centre, where even more redevelopment is taking place.
Four residential towers with a total of about 1,500 homes are approximately two years into a four-year construction timeline, Kwiatkowski said.
QuadReal Property Group’s plans for its Oakridge Centre may even surpass Shape’s redevelopment efforts.
A July 31 Statistics Canada report singled out Oakridge when it said, “B.C. posted its third largest value on record for residential [building] permits in June, up 20.4 per cent to $1.3 billion due to large projects such as the Oakridge Centre redevelopment.”
Much of Oakridge resembles a construction zone, and QuadReal’s plan is to have 10 towers that contain about 2,000 condominiums and 580 homes that are either market-rental or subsidized dwellings.
Meanwhile, Cadillac Fairview has started redeveloping space at CF Pacific Centre, at the northeast corner of West Georgia and Howe streets, where a glass atrium has stood for decades.
One of the worst kept secrets in Vancouver’s retail scene is that Apple Inc. plans to lease much of that redeveloped space to build a flagship store, although neither Apple nor Cadillac Fairview has officially confirmed those plans.
The mall owner has not said what it will do with space in the empty former Four Seasons Hotel on Howe Street.
Cadillac Fairview’s senior vice-president and portfolio manager for Western Canada, Tom Knoepfel, told BIV earlier this year that his company bought out Sears Canada’s lease on 110,000 square feet at Richmond Centre before the chain’s demise so Cadillac Fairview could better envision how to transform the space.
“Our strategic focus has been on densifying the site, and as a result the plan is to add about 2,200 residential units to the property,” he said.
“We’ve intentionally kept that [space] vacant in order to do our planning for the redevelopment of the south end of Richmond Centre.”
Ultimately, he said, the former Sears space in that mall will be torn down to accommodate residential units as well as stores.
Metropolis at Metrotown shopping centre owner Ivanhoe Cambridge had legal spats with Concord Pacific about redeveloping the former Sears space that Concord Pacific owned. Concord Pacific eventually won approvals to build several towers, including a 65-storey condominium building, on that site.