Yorkdale is spending $220 million to make room for 40 new stores and 800 more parking spots. the food court will also be enlarged.
One of Toronto’s biggest shopping malls is about to get bigger.
Yorkdale Shopping Centre announced Tuesday it will spend $220 million building an addition to house 40 new stores.
The news comes a day after one of Canada’s leading developers said it would bring U.S.-style outlet malls to Canada for the first time.
RioCan Real Estate Investment Trust said it is partnering with Tanger Factory Outlet Centers in a $1 billion deal to build 10 to 15 such malls across Canada.
Both announcements reflect the growing demand from retailers outside Canada for space in what has been a tight market.
They were also generating a lot of “buzz” at the International Council of Shopping Centres convention in Whistler, B.C., on Tuesday.
“The excitement in the retailer industry is just incredible right now,” John Crombie, branch manager for Cushman& Wakefield, a commercial real estate firm in Toronto, said from the convention floor.
Crombie said he has toured several U.S. and European retailers through Yorkdale. He declined to name them, but said: “When they hear the numbers, they’re blown away. They all want to be there.”
Yorkdale is more than twice as productive as the average shopping centre, generating $1,207 per square foot in sales, Crombie noted.
The expansion is Yorkdale’s second in five years and is unlikely to be the last, said general manager Anthony Casalanguida. “There may be additional announcements two to three years from now.”
U.S. retailers who have disclosed plans to open stores in Canada include J. Crew, Kohl’s department store, off-price fashion outlet Marshall’s, and discount department store chain Target.
Many see Canada as the first stop on their way to becoming a multi-national player. Canada’s economy has held up better than the U.S., where the retail market is saturated.
A mall like Yorkdale is likely to attract high end specialty chains. Recent new tenants include the lingerie brand Victoria’s Secret and house wares retailer Crate & Barrel.
Meanwhile, RioCan and Greensboro, N.C.-based Tanger said they plan to open the kind of outlet malls that brand-name merchandise at 20 to 60 per cent off regular prices.
Tanger operates 33 centres in the U.S. with 375 different stores, including discount versions of such high-end retailers as Saks and Neiman Marcus, along with more moderately priced chains and teen clothing brands, such as The Gap and Abercrombie & Fitch.
No locations have been announced. They’re unlikely to locate near existing full-price retailers, Crombie said.
Yorkdale’s Casalanguida said he’s not concerned about the emergence of off-price competitors.
“I think there’s room in the market for additional players. We always have to be on our game,” he said. “The consumer will be the winner. More competition means more choice.”
Construction at Yorkdale, which begins this month, will adversely affect the south parking lot, the mall acknowledged. Customers will be steered toward additional parking on the upper decks.
The mall plans to add 800 underground spaces, increasing the total by 200, as part of the construction project.
It will also relocate and expand its food court.
The renovation will expand the mall’s footprint by 10 per cent and is expected to draw an additional 2 million visitors a year and boost annual sales to $1 billion, Casalanguida said.
At 1.4 million square feet, Yorkdale is one of the largest malls in the Greater Toronto Area.
Five years ago, the mall spent $110 million renovating a former Eaton’s department store to accommodate 40 new retailers.
