Deloitte Real Estate’s recent Crane Survey highlights a trend in retail mall ownership: there are few opportunities to buy malls, leading prospective mall owners to either build new developments or to reinvest in existing assets.
The report notes that a handful of groups own the majority of large retail assets in Metro Vancouver.
“Most of the larger shopping centres in Canada are owned by a select few groups, and they haven’t been sellers in recent years,” Andrew Evans, who co-authored the report, told Business in Vancouver.
“It’s not that there was a lull this year. That’s just the way the market is. The guys want to hold onto these trophy assets because they perform well.”
Only two retail assets have sold with a price tage of $50 million or more in the past year:
- The Village at Thunderbird Centre was acquired by Sun Life for a reported $148 million; and
- the plaza at New Westminster Station was acquired by First Capital Realty for $100 million plus an earn-out of up to $20 million.
Having few opportunities to buy malls means there are two options for developers: build new malls or expand existing properties.
New malls in various stages of planning and development include:
- Ivanhoe Cambridge and the Tsawwassen First Nation’s planned Tsawwassen Mills project;
- Property Development Group’s planned Tsawwassen Commons project;
- Vancouver International Airport Authority and McArthurGlen Group’s planned outlet mall on Sea Island;
- Shape Abbotsford West LP and Hoopp Realty Inc.’s under construction Highstreet in Abbotsford.
Some of the many mall expansions, which are either underway or slated, include:
- Morguard Investments Ltd. and Pension Fund Realty Ltd.’s Coquitlam Centre;
- Ivanhoe Cambridge’s Guildford Town Centre;
- Shape Properties (Brentwood) Corp. and Brentwood Towncentre Inc.’s Brentwood Town Centre;
- Park Royal Shopping Centre Holdings Ltd.’s Park Royal Village and
- Ivanhoe Cambridge’s Oakridge Town Centre; and
- Aberdeen Project Thirteen Ltd.’s Aberdeen Square.
