Members of the retail panel at the Real Estate Forum in December in Toronto; from left Inge van den Berg of Cadillac Fairview, Don Clow of Crombie REIT, Jan Kestle of Environics Analytics, David Zietsma of Jackman Reinvents, and moderator Nurit Altman of RBC Capital Markets. (Steve McLean RENX)
“From the rise of e-commerce to the growth of the experience, the massive influx of luxury retailers into this country and the closure of some big names, the reimagining of spaces and the addition of new uses, the common thread is change.”
David Zietsma, senior vice-president of strategy and performance for Jackman Reinvents, followed with a presentation on the changing role of bricks-and-mortar retail. He said e-commerce represents 10 per cent of Canadian retail sales, a number expected to hit 15 per cent by 2023.
Forty per cent of manufacturers sell directly to consumers, 47 per cent plan to add that capability soon, and 87 per cent see it as relevant to their products and consumers.
“The relationship that consumers have is to the brand and the product, not to the retailer,” Zietsma said.
“That’s pushing retailers to think about what roles their physical stores play in this. Is it about traditional fulfillment and making things easy, or is it about engagement?”
Zietsma said mall landlords can create better experiences and increased engagement for consumers through embracing convenience, curation and collaboration.
Using data to help retail decisions
Environics Analytics president and chief executive officer Jan Kestle followed with a presentation on retail disruption involving evidence-based decision-making.
“Over the past year, we have seen more organizations — on the investor level, the developer level and the retailer level — doing more exciting and innovative things with data in order to help deal with this challenge,” she said.
Kestle noted it was previously difficult to “get a handle on the consumer and understand how much power the consumer has, and how to make location decisions and investment decisions on the ground at the local level, and how to combine the investment in bricks and mortar with marketing.”
Now, however, the retail sector is doing “innovative and exciting” things with data.
Urban residents shop online at higher rates and spend more while they’re at it, according to Kestle. She attributes this to young people moving to these locations and embracing online shopping.
Smart phones provide information
There are many new ways to understand consumer patterns based on their smart phones, as long as permission is obtained and the data is collected properly, said Kestle.
“The opportunity for understanding who comes, when they come, time of day, day of week, what stores they go to, whether they park and how they come, it’s opened up a whole new world for actual retail location analysis.”
The information can impact decisions on where to invest, maximizing returns, finding the best tenants and efficiently engaging area consumers.
Such data was taken into consideration for the redevelopment of CF Richmond Centre in Richmond, B.C., which will include 2,297 housing units and 362,000 square feet of new retail and restaurant space. Kestle said data enabled developer Cadillac Fairview to:
* validate the residential suite mix and amenities;
* develop the food and entertainment component;
* and tailor the retail mix to avoid over-exposure in high online shopping categories.
Similarly, Kestle said the overhaul of Midtown in Saskatoon was made easier by data that enabled operator and manager Cushman & Wakefield to:
* identify population segments driving market growth and mall visitation;
* devise a leasing strategy around the interests of target consumers;
* and develop local marketing to get those target customers shopping.
Cadillac Fairview retail innovations
Cadillac Fairview VP of strategic insights Inge van den Berg said she’s seen a higher rate of growth in many suburban shopping centres. CF is catering to local markets rather than using a one-size-fits-all model for its malls.
Part of the strategy is working with retailers to enhance a sense of community at its shopping centres.
This includes beta testing an application called CF Browse at CF Toronto Eaton Centre which allows consumers to use their smart phones to search brands, key words and retailers, use a way-finding system to direct them to a store and research its inventory, sizes, promotions and contact information.
Some formerly pure-play online retailers are now opening physical stores and van den Berg said 60 per cent of people placing online orders prefer to pick them up in stores.
“For every $100 that a person spends online, when they go to pick it up in the store on average they spend an additional $131.”
Crombie REIT and Sobeys
Crombie REIT president and CEO Don Clow thinks the Canadian retail sector is in good shape, noting more stores have opened than closed in Canada in the last three years. He also noted there’s 40 per cent less square feet of retail per capita in Canada than in the United States.
Canada’s retail sales are approximately $800 per square foot compared to $500 south of the border.
Clow said 90 per cent of Crombie’s business is in grocery-anchored strips, five per cent in regional shopping centres and five per cent in office.
Empire Company Ltd., the Sobeys grocery store chain owner, also owns 41 per cent of Crombie and accounts for more than half of its revenue. Clow said that just one half of one per cent of Canadian grocery sales take place online.
Looking to the future, however, Sobeys partnered with the United Kingdom’s Ocado Group on a grocery ordering, automated fulfillment and home delivery solution.
They’re developing two large customer fulfillment centres around Toronto and Montreal and will likely open two more in Western Canada. Portions of stores close to these centres may also have fulfillment hubs to mitigate home delivery costs, according to Clow.
Intensification of existing retail sites
“Our major markets and secondary markets are virtually the same from a retail point of view,” said Clow.
“The difference for us now is that we have a very large development pipeline, which is a different strategy about intensifying urban stores with multiple residential towers above.
“That’s not only driving retail performance, but also the value of those sites.”
Crombie owns about one-third of Sobeys sites, and the grocer can work with different developers for intensifying other sites.
Clow said grocery stores purchased in Vancouver for $30 million seven years ago now sit on land that could be worth up to $100 million and building residential above the retail could increase that value to $300 million to $400 million.
“Development’s a natural play for us and those sites. It’s really a matter of trying to figure out how you do it and at what pace you can do it. It’s an amazing opportunity.”
Cadillac Fairview also owns large amounts of land adjacent to its retail properties. There are plans for intensification at these sites, according to van den Berg, since there’s “a need to continue to look at diversifying cash flows.”
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
