Ottawa’s commercial retail market has plenty of room for growth as Target and several other new outlets prepare to introduce near unprecedented growth in the number of options available to local consumers, a retail analyst said.
Some of the new names gracing Ottawa storefronts will include Target, H&M, Nordstrom, Whole Foods and possibly Simons. Additionally, several business improvement areas (including those for Sparks Street and Bank Street) have been looking at getting more high-pull tenants on to their streets.
H&M announced this week it will be opening at Bayshore in October, while a spokeswoman for Target said the store’s exact dates should be revealed soon.
Meanwhile, Lansdowne Park is being redeveloped into a shopping complex, a Bayshore Shopping Centre expansion is under way and the Rideau Centre is seeing big changes in the wake of Sears Co. and Empire Theatres vacating their large spaces.
That’s a lot of movement, but Shore Tanner & Associates retail analyst Barry Nabatian said that if anything, Ottawa is still an underserved market.
“The city of Ottawa is primarily, still, a mid-price, mid-quality retail market,” said Mr. Nabatian, the director of Shore Tanner’s market research division. In the case of all but Target, “we lack high-end specialty stores, and that is the reason (they are coming).”
Target will replace the Zellers market that the Canadian retailer vacated in the wake of Target’s takeover, Mr. Nabatian added.
Several statistics about Ottawa’s commercial retail space point to a market that is in need of growth, Mr. Nabatian said:
- Most cities in North America have 30 per cent of their space as big-box retail. Ottawa’s is 24 per cent.
- Ottawa’s average price of $485 per square foot is far above the North American average of $400 per square foot in most cities.
- In the industry, the norm is to have 30 to 40 square feet of retail space per resident. Ottawa’s is 28 square feet.
- Ottawa’s vacancy rate of three per cent is below the industry standard of eight to 10 per cent.
The big winner in this expansion will be the Ottawa economy as consumers stay home to shop rather than heading off to Montreal or Toronto, Mr. Nabatian said.
He did not cite any region of the city that would benefit any more than another, but said the big challenge for most BIAs is to find specialty stores, ones that will cater to the local neighbourhood, since they cannot compete with the indoor shopping malls.
Lansdowne has its own challenges, as it is hampered by poor transit access and a lack of parking, Mr. Nabatian added. It does, however, have two high-end condos under construction catering to singles and couples who have disposable income, providing a captive market for the mall.