Opinion: Retailers find more bang for their buck at the Train Yards

Marlene Shepherd, doyenne of Ottawa’s fashion retailers, says she took “an educated risk” when she opened a Shepherd’s Fashions store in April 2012 at the Train Yards retail shopping complex.

She wondered whether her well-heeled and fashion-conscious clients – accustomed to shopping at her stores in the Rideau Centre and Bayshore indoor shopping malls – would go out of their way to visit her new location in an industrial area beside the Ottawa train station.

After almost two years of business in the Train Yards, Ms. Shepherd now says she need not have worried.

“It’s great, amazing, beyond expectations,” she says. “It satisfies the needs of customers who want to park at the door of the store.”

If tenant satisfaction with the mall is any indication, the Train Yards has surpassed all expectations.

The mall is among a growing number of large shopping complexes in which each store is separate, with no connecting indoor space for customers.

Some people think of the Train Yards as an east-end location, but Ms. Shepherd says it isn’t.

“It’s very central, and just one exit off the Queensway from Nicholas Street. It’s almost downtown, there is lots of free parking, and it has more ways for motorists to get in and out than Bayshore has.”

The Shepherd’s store at the Train Yards has more than twice the floor space of Ms. Shepherd’s former location in the Bayshore Shopping Centre. She closed the Bayshore store in July 2013 after deciding to move out during the expansion of the west-end indoor mall.

She says she’s undecided between returning to the mall when expansion is completed or finding a new location in Kanata. She continues to have a store in the Rideau Centre.

The extra space at the Train Yards store allows Ms. Shepherd to offer more choice and to expand her product line to include gift items, home decor and furniture. She says she’s now doing more sales volume than she did at Bayshore.

Rent for the Train Yards can be about half as much per square foot as for space in large indoor shopping malls like the Rideau Centre and Bayshore, according to Ottawa retail analyst Barry Nabatian, director of market research for Shore Tanner & Associates.

But there is more to it than just savings in rent, says Mr. Nabatian. Tenants of indoor malls must pay communal costs of operating the shopping centre as well as any other costs imposed by the landlord.

Ms. Shepherd says she likes the increased freedom to run her business the way she wants.

“We decide our own hours,” she says. “There is no advertising budget (to promote the shopping complex), and no percentage rent.”

Another happy tenant of the Train Yards is Sail, which sells a vast array of sporting goods. Sail picked the Train Yards for its only Ottawa-area store because of where it is.

“It’s probably the best location we could have picked,” says Richard Viger, Sail’s marketing director. “It’s great for our customers from both Ontario and Quebec,” he says, noting that the store is just a few minutes’ drive from bridges across the Ottawa River.

Quebec-based Sail has nine stores, and the Train Yards store ranks among the best in sales volume, Mr. Viger says.

“It’s very easy for customers coming by car to get in and out of the Train Yards,” he adds. “The developers have done a great job with the project, and there are lots of well-known retailers.”

With renovations under way at Bayshore and the Rideau Centre to go along with new space being added at Lansdowne Park, Ottawa is currently in an unprecedented retail expansion boom. But don’t expect the Train Yards to be left behind.

The site currently has about 650,000 square feet of retail space. Marty Koshman, president of Ottawa Train Yards Inc., which manages the complex, told OBJ he expects about 250,000 square feet of retail space to be added in the next two or three years. He says he’s talking to prospective tenants, but declined to name them.