Landlords will grapple in 2018 to fill empty space left by Sears Canada’s collapse but that will not stop new construction and expansions at Metro Vancouver shopping centres.
Renovations at large retailers such as Holt Renfrew will also complete, and new brands will launch storefronts to woo shoppers across the region. All this will happen while the established Granville Street strip in downtown Vancouver transforms.
Sears Canada’s October 10 announcement that it planned to close all stores and liquidate assets was likely the most consequential retail announcement of 2017.
The shutdown affects 189 stores branded Sears, Sears Home or Hometown. Those stores will all be gone early in 2018.
Unlike when Target Canada abruptly closed more than 200 stores in 2015 – a mere two years after opening its first Canadian location – B.C. mall owners were expecting Sears Canada’s announcements.
“It was no secret that Sears was struggling,” Cadillac Fairview’s senior vice-president and portfolio manager for Western Canada, Tom Knoepfel, told Business in Vancouver.
At Richmond Centre, mall owner Cadillac Fairview in early 2015 bought Sears Canada’s lease on a 110,000-square-foot space that anchored the mall’s south end. The landlord has left the space empty ever since.
“One of the development schemes we’re considering [at Richmond Centre] is to look at something different from just the existing box,” Knoepfel said. “Do we tear down the box and build something different there? We’re looking at that.”
Concord Pacific is proposing to transform former Sears Canada space that it owns next to the Ivanhoé Cambridge-owned Metropolis at Metrotown by building condominium towers.
As for Cadillac Fairview, other construction in 2018 may include tearing down its Pacific Centre glass atrium at the corner of West Georgia Street and Howe Street, Knoepfel said.
“Within the next 12 to 18 months we will be proceeding with a development on that corner, in all likelihood,” he said of the space for which the city has already granted a development permit.
The McArthurGlen Designer Outlet Vancouver Airport may have shovels in the ground as early as spring 2018 to construct a 160,000-square-foot Phase 2, general manager Robert Thurlow told BIV.
Official board approval for that long-anticipated expansion is yet to come.
Then there is the mall in Burnaby that officially calls itself the Amazing Brentwood. Construction is underway to increase the mall’s size to 1.1 million square feet, up from about 500,000 square feet, but the work is unlikely to be complete until at least 2019.
“A lot of new retailers will open stores in Metro Vancouver in 2018,” said Retail Insider Media owner and sector analyst Craig Patterson.
“Deciem is just starting to expand into Vancouver. Their first two locations will be at Metropolis at Metrotown and at 408 Howe Street, at Hastings [Street]. It has a cult following and is very popular.”
Patterson also pointed to Alberni Street where Swiss luxury conglomerate Richemont Group is building three luxury boutiques – a flagship two-level Van Cleef & Arpels, an adjacent IWC Schaffhausen and an Officine Panerai.
Observers say Montecristo Jewellers could open on Alberni Street in space vacated by the Italian Kitchen restaurant. It would be a fourth location for the Vancouver-based jeweller. French luxury brand Hermès is expected to open at the corner of West Georgia Street and Burrard Street.
The downtown part of Vancouver’s Granville Street has been struggling for years with empty storefronts, including space at the former Tom Lee Music building and at the former Empire Granville 7 cinema complex, but the street appears to be turning a corner.
“Having the [former cinemas] empty has been like the two front teeth of somebody’s smile being knocked out,” said Kerry Bonnis, a principal at Bonnis Properties, which owns much of the central part of Granville Street, including the former Tom Lee Music premises, the Best Buy building, the Commodore Ballroom and several other buildings.
Brokers for the former cinema “have come very close to some very high-profile deals that, in the 11th hour, fell though,” Bonnis told BIV. “I know that a deal is imminent and that’s great because the vacancy created a disconnect between the 900- and 700-blocks on the west side of Granville Street. To have the site occupied with activity during the day will be extremely important for all the retailers and create a better pedestrian experience.”
Bonnis’ five-storey former Tom Lee Music space is being renovated, and he is finalizing a lease for an international technology company to take all 60,000 square feet of office space in the building’s four floors above street level.
Street-level space in the building will be split into four parts with a licensed, gourmet-burger restaurant leasing and combining two of the spots. An international specialty-food chain is finalizing a lease to take one of the other spaces with the final unit potentially going to the office-space tenant to operate a café. It has not yet been decided whether the café will be open to the public or to employees only.
“On Granville Street and in downtown in general, a lot of the cafés and restaurants are doing quite well,” Bonnis added. •
