Sweden’s H&M is one of the most popular names being bandied about to fill the 83,000 square feet remaining on the Rideau Centre’s bottom floor after American fashion retailer Nordstrom announced it would take over Sears’ top two levels. But Barry Nabatian, director of the market research division at Shore Tanner & Associates, says the mall should split the vacant space into five or six upscale stores each between 10,000 to 15,000 square feet in size.
“It would attract a wider diversity of shoppers,” he says, adding that Nordstrom likely signed an exclusivity clause stating no other large department stores can be below it.
The mall would also be well served by reserving space for cultural activities, such as a performance theatre, Mr Nabatian says.
The Rideau Centre is a prime example of how regional malls are having to become more high-end because they can’t compete with bargain stores such as Walmart, Target or Winners.
“They have got to become more upscale in order to attract higher income people and those who would like to be pampered,” Mr. Nabatian says. “With the Rideau Centre, everything is there: restaurants, coffee shops, and shopping becomes a pleasurable experience instead of a necessity.”
With regional mall vacancy rates sitting at 0.6 per cent in Ottawa, according to Cushman & Wakefield’s second quarterly results, the large vacant space is a boon to the local retail landscape.
A balanced vacancy rate is between five to eight per cent, Mr. Nabatian says.
Nordstrom will open its doors to Ottawa in spring of 2015 after Sears shuts down next month.
Partnering with Rideau Centre landlord Cadillac Fairview, Nordstrom will expand into four of the commercial real estate investor’s Canadian malls in Ottawa, Toronto, Calgary and Vancouver.