Mall owners upgrading properties to draw foreign retailers

Mall owners are injecting billions of dollars into their properties ahead of Target and Nordstrom’s Canadian debut, hoping the investment will woo shoppers and attract coveted retailers, reports The Globe and Mail.

Cadillac Fairview this week announced a $350-million revitalization of its upscale Sherway Gardens mall in Toronto’s west end, which will host the GTA’s first Nordstrom store. The project will see upgrades to the 41-year-old property, and the addition of some 210,000 sq.-ft. of retail space.

"By making room for new best-in-class retailers and enhancing our overall shopping and dining environments, we are extending the mall's appeal to the increasingly affluent, discerning shopper that Sherway Gardens attracts," Clive Baxter, vice-president of the Ontario Portfolio, said in a press release.

Other developers, including Triple Five Group, owners of the West Edmonton mall, and RioCan, among the largest Target landlords, are also pouring money into their properties, or building new luxury outlets.

The goal, writes Globe and Mail retail reporter Marina Strauss, is two-fold: With upgraded buildings, developers are more likely to win new business, and enable them to charge higher rent. The renovations and foreign retailers may also attract more Canadian shoppers, who are increasingly turning to the Internet for their purchases. According to data cited in the Globe’s article, online spending in this country totalled about $18 billion in 2012, and is expected to grow.

Cadillac Fairview, for its part, isn't losing customers to the Web without a fight. Over the next few years, it plans to invest about $1.6 billion in the malls that will host some of the highest-profile foreign retailers.