Ottawa’s retail market has yet to recover from the departures earlier this year of Target Canada and Future Shop, according to Cushman & Wakefield’s second-quarter snapshot released Friday.
And the city likely won’t bounce back for some time, the report added.
Overall, Ottawa’s retail vacancy rate jumped to five per cent, an increase of two percentage points from the last half of 2014.
“This dramatic increase in vacancy was a result of the Target and Future Shop closures, both of which left sizable pockets of space,” the report said, adding that Jacob, Mexx and Sony Store closures did not help. Other chains also shut down some underperforming stores, it said.
Of the city’s regional malls and large power centres (those covering more than 375,000 square feet), Place d’Orleans was hardest hit, according to the report. The closure of Target and several clothing retailers left it with 139,000 square feet of empty space.
Kanata Centrum also suffered a major blow after being left with a 25,000-square-foot vacancy when Future Shop announced in March it was shutting all of its stores for good.
While the overall vacancy rate in the division remains relatively low at 3.6 per cent, that is still two full percentage points higher than the last half of 2014, the report said.
The community malls and and smaller power centres (110,000- to 375,000-square-foot) division also felt the sting of Target’s departure. While Wal-Mart will move into the empty space at Billings Bridge Plaza and Lowe’s is taking over the discount store chain’s location on St. Laurent Boulevard, there have been no takers yet for the 117,000-square-foot former Target space in Hazeldean Mall or the 124,000-square-foot vacancy at Meadowlands Mall.
The vacancy rate in this division jumped 1.7 percentage points from the end of 2014 to 6.6 per cent, the report said.
Due to their smaller size, neighbourhood malls (those in the 10,000- to 110,000-square-foot range) were relatively unscathed by the exodus, the report said, with their vacancy rate actually dropping half a percentage point to 4.6 per cent. It’s expected this segment will see further construction to continue servicing the outlying areas, Cushman & Wakefield said.
The vacancy rate in the core office tower segment jumped to 9.9 per cent, largely because high-end retailer Holt Renfrew closed its only Ottawa store at 240 Sparks at the beginning of the year.