Posted Nov 8, 2020, 9:28 PM
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Join Date: Jan 2015
Location: BC
Posts: 4,378
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Homebound workers inject life into suburban malls after downtowns empty out
Quote:
As the coronavirus pandemic rages and most downtown office employees in many cities work from home at least through year-end, urban retailers’ loss is turning out to be suburban shopping centres’ gain.
For many years, downtown malls have been more profitable, attracting office-goers and tourists congregating in city centres, while suburban malls have been relegated to the role of poor relations.
The coronavirus pandemic is turning that on its head.
"A lot of people who used to commute to downtowns on a daily basis are not anymore," said Tim Sanderson, head of Canadian retail at real estate services firm JLL JLL.N in Toronto. "Where are they getting dry cleaning done, picking up dinner? ... They're doing it in their suburban shopping centre."
Traffic in Canadian suburban malls owned by Cadillac Fairview, the property unit of Ontario Teachers’ Pension Plan, is now at more than 70% of pre-pandemic levels, while less than half of shoppers have returned to its downtown malls, Executive Vice President of Operations Sal Ianoco told Reuters.
The same story reverberates around the globe.
In the UK, foot traffic was down 40% and 34.6%, respectively, in high streets and shopping centres in mid-October compared with a year earlier, while retail parks saw a decline of only 13.2% from last year, data from analytics firm Springboard showed.
While mall owners with both urban and suburban locations are expected to weather the hit from the pandemic, already-beleaguered retailers in downtown shopping centres face much bleaker prospects.
With the crucial year-end holiday shopping season looming and few shoppers expected to turn up at downtown malls, the surge in permanent store closures and bankruptcies already seen this year is likely to worsen.
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Within suburbs, outlet malls and unenclosed shopping centers - the former luring cost-conscious shoppers in uncertain economic times, and the latter seen as safer amid the coronavirus outbreak - have fared better than enclosed ones.
“Traditionally, open-air malls, especially strip malls but even outlet malls, were the poor cousins of big flagship enclosed malls,” said Karl Littler, senior vice president for public affairs at the Retail Council of Canada.
“But now, open-air malls are doing better than enclosed malls,” he said.
Ed Sonshine, chief executive of Riocan REIT REI_u.TO, Canada's second-largest property trust, said the company's suburban shopping centres - all unenclosed and most anchored by essential businesses like grocery stores - are, in many cases, doing even better than before the pandemic.
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