As Retail Market Thrives, Landmark Toronto Shopping Center Preps for $120M Makeover

June 22, 2010
By Barbra Murray, Contributing Editor

Is anyone plunking down the big bucks to bring new life to a shopping destination these days? It’s not happening in the U.S., but in Canada, Cadillac Fairview Corp. is just days away from kicking off a $120 million renovation of the landmark 1.7 million-square-foot Toronto Eaton Centre.

Spanning two city blocks downtown, the 33-year-old Eaton Centre is, and has long been, one of the top premier urban shopping centers in Canada. “It’s a super-regional mall and it’s a tourist attraction, and its location is on what is almost a national corner; it’s much the same as 5th Avenue in New York City,” Murray Huffman, Vice President of Retail Services with real estate services firm Cushman & Wakefield, told CPE.

Featuring over 235 retail and restaurant venues, the three-and-one-half story property was originally designed by Bregman & Hamann Architects and Zeidler Partnership Architects. The initial phase of the new upgrade endeavor, scheduled to commence July 1, will encompass the expansion and redevelopment of the property’s existing north food court, and the renovation of the south food court.

Coupled with the housing collapse, the recession in the U.S. has been devastating to the country’s retail market. While Canada did not completely escape the fallout, its retail market has continued to hold up. “The retail market in Canada, specifically in Toronto, has fared much better than U.S. markets,” Huffman said. “We didn’t get burned too badly. From regional centers to storefronts, there is still a lot of demand.”

Given the stability of the market, retail real estate experts in Toronto see Cadillac Fairview’s million-dollar renovation of Eaton Centre as a good move. Demand exists. “Eaton Centre is one of the top two or three centers in Canada,” Adam Bell, Vice President with real estate services firm DTZ Barnicke’s retail group, told CPE. “It’s anchored by the subway line so it has very high traffic and it’s a big tourist destination. And Toronto has a very healthy downtown; it has strong residential and commercial elements.”

While Eaton Centre is performing well, it is expected to benefit even further from its massive upgrade. Other retail properties in Canada are also weathering economic challenges better than assets in the U.S. “It’s amazing how the retail market has held out over the last 12-18 months,” Bell noted. “The market is much stronger than the U.S. market because we didn’t suffer the same economic downturn and because we have less retail per capita; there really isn’t an oversupply. It’s very difficult to get space in Class A malls or any of the major malls unless you are a big player.” Such as lingerie retailer Victoria’s Secret, which debuted its Pink outlet chain with the opening of four stores in Canada in October 2009.

“Retail in Toronto has never been more exciting as private labels and high end brands begin to branch out into stand-alone concepts, and more and more international retailers enter the market,” Susan Allen, General Manager of Toronto Eaton Centre, told CPE. “Toronto consumers are worldly and knowledgeable and are embracing these new retailers. Having the best of the best at Toronto Eaton Centre helps the Centre stay positioned as the leader in Canada.” Cadillac Fairview expects to complete the renovation of Eaton Centre in July 2012.