Toronto is Canada’s largest market with the Greater Toronto Area (GTA) making up over 15% of the country’s population. In addition to being a gateway to the rest of Canada’s increasingly affluent population, Toronto is attractive for retail growth given the city’s sophisticated, globetrotting residents who reside in a thriving, prosperous urban environment.
The retail real estate market in the GTA continues to be a bright light in the gloom of the ongoing recession, with high demand, low vacancy rates and rising rental rates. The sustained success of the retail market has brought investment levels into the market that reached new heights in 2011.
Vacancy rates for street front retail continues to decline and sits at about 9%. Power centers and regional malls are doing even better with a vacancy of about 3%. While smaller neighborhood malls have vacancies of approximately 8.5%, some under-performing strip centers are being sold and redeveloped into mixed-use projects. With vacancies at such low levels, rental rates in most categories increased in 2011 by an average of 3% from 2010.
The GTA retail investment markets took over 23% of the total commercial investment in 2011, accounting for $3 billion dollars of sales. Pension funds, which sat on the sidelines last year, have been very active in the market. The average cost of retail real estate was $368 psf with an average cap rate of approximately 6.5%.
Eaton Centre at Yonge-Dundas
The Eaton Centre at Yonge-Dundas is Canada’s largest downtown mall and a focal point of the central core, boasting a sales productivity of $1,300 per SF.
Yonge-Eglinton is the city’s uptown retail market, and has become a major center due to the influx of young, urban professionals living in the area.
Yorkdale Shopping Centre
Yorkdale Shopping Centre, located on the northern fringe of the central city, has begun a major expansion of 140,000 sf that will increase its footprint by 10% and allow for the addition of new luxury brands. The expansion space is already fully leased.
Queen Street West
Queen Street West is the most urban, young, and trendy of all retail markets in the GTA featuring many independent, hip boutiques alongside established design conscious brands.
Spadina Avenue, intersecting with Queen Street West, caters to city residents of Chinatown and the downtown with urban, gritty, and eclectic independent retailers.
Square One shopping center
Like Sherway Gardens, Square One shopping center also caters to mass market consumer profiles with a range of offerings from mid to upmarket outlets with a large catchment area extending north and west from the GTA.
Sherway Gardens shopping center
Sherway Gardens shopping center caters to mass market consumer profiles with a range of offerings from mid to upmarket outlets with a large catchment area extending north and west from the GTA.
Vaughan Mills is the city's home of tourist and entertainment attractions and provides a mix of factory outlets and concept stores, making it a paradise for fashionistas and recessionists alike.
Bloor Street West and Yorkville
Bloor Street West, and adjacent Yorkville, make up the city’s most upscale retail market and demand Canada’s highest retail rents, a 2011 average of $315 psf.
|KEY AREAS / STREETS/SHOPPING CENTERS||CONSUMER PROFILE||MAJOR RETAILERS PRESENT||NEW ENTRANTS||TYPICAL RENT FOR UNIT OF 2,000 SQFT||RANGE OF UNIT SIZES|
|Yonge/Dundas (Eaton Centre)||Mass market||Sears, Indigo, Apple, Old Navy, Forever 21, Abercrombie & Fitch||J. Crew, Juicy Couture||$50 PSF/ANNUM||800 to 8,000 SF|
|Queen Street West||Trendy, young consumers||Urban Outfitters, American Apparel, Parasuco, Structube, Lululemon, independent boutiques, music stores||CB2||$95 PSF/ANNUM||800 to 5,000 SF|
|Spadina Avenue||Lively retail, food and leisure area catering to downtown and Chinatown residents, visitors||Large stock of independent retailers with an eclectic mix of food, apparel, electronics, discount outlets||Various Independents||$30 PSF/ANNUM||500 to 10,000 SF|
|Bloor Street||Luxury and designer conscious||Gucci, Tiffany, Holt Renfrew, Cartier||Victorinox, Intermix||$315 PSF/ANNUM||500 to 25,000 SF|
|Yonge & Eglinton||Local mid-to-upmarket residents. Young, urban professionals||Indigo, Toys’R’Us, Metro, Kitchen Stuff Plus, Black’s||Urban Outfitters||$55 PSF/ANNUM||1,200 to 10,000 SF|
|Yorkdale Shopping Centre||Increasingly upscale, luxury alongside mass market||Apple, Williams-Sonoma, Gap, Sears, MAC, The Bay, Banana Republic, Holt Renfrew||Cartier, Topshop||$160-$200 PSF/ANNUM||3,000 to 15,000 SF|
|Sherway Gardens Shopping Centre||Mass market||Abercrombie & Fitch, Foot Locker, American Eagle, Guess, The Bay||Forever 21||$100-$130 PSF/ANNUM||2,000 to 15,000 SF|
|Square One Shopping Centre||Mass market||American Eagle, H&M, Apple, Sephora, Running Room||Zara, Michael Kors||$100 PSF/ANNUM||1,500 to 15,000 SF|
|Vaughan Mills Shopping Centre||Mass market (factory outlets and concept stores)||Adidas, Champs, Guess, BCBG, Gap, H&M, Lacoste||Stitches, Sunglass Hut||$75 PSF/ANNUM||5,000 to 15,000 SF|
Data as of August 2012
Canada is blessed with a multicultural population and abundant food retailers, offering a full range of global cuisine at all price points.
New, increasingly health-conscious brands entering the Fast Food market include Toronto-wide Freshii and Sandwich Box.
Continuing to hold casual dining market presence are Canadian chains Jack Astors and Milestone with recent expansion overlooking Yonge-Dundas square.
Hero Burger, South St. Burger and Big Smoke Burger are all taking over the fast food quality burger category with locations GTA-wide.
The Eaton Centre has recently completed a $48 million renovation to its foot court. The “Urban Eatery” includes express locations of Toronto restaurants, including Indian brand Amaya and vegetarian brand Urban Herbivore.
Fine dining chain Oliver & Bonacini continues to build its mid-market focus with Bannock at Yonge-Queen in The Bay, Canteen at the TIFF Centre and their chain of O&B Cafes expanding at Yonge-Front and Bayview Village.
Origin, located in the St. Lawrence Market area and opened by executive chef Claudio Aprile of Colborne Lane, has recently announced expansion plans into Liberty Village and Bayview Village for 2012.
Casual fine dining brands currently experiencing growth include Teroni, Pizza Libretto, and Guu with outlets strategically placed in trendy, exciting parts of the city like Queen Street West, the Danforth, the Annex and Yonge-Summerhill.
|KEY AREAS||CONSUMER PROFILE||FOOD & BEVERAGE OPERATOR INCLUDING||RENT FOR 3,500 SQFT UNIT|
|Downtown West||Entertainment district. Trendy night clubs||Mid Range||$30 PSF/ANNUM|
|Downtown Financial Core||Business crowd. Theatre district||All Categories||$40 to $70 PSF/ANNUM|
|College Street||Trendy, lively and leisure district||Mid Range||$25 PSF/ANNUM|
|Downtown East||Primarily services local condo dwellers||Mid Range||$25 PSF/ANNUM|
|Yonge & Eglinton||Young professionals, singles, bar scene||Mid to High End||$40 PSF/ANNUM|
|Danforth Avenue||Multi cultural dinning||Low to Mid Range||$30 PSF/ANNUM|
|Bloor/Yorkville||Upscale dinning||Mid to High End||$45 - 55 PSF/ANNUM|
|Yonge & Eglinton||Entertainment district. Trendy night clubs||Mid Range||$30 PSF/ANNUM|
Data as of August 2012