Canada’s haute couture streets are a bargain for top-end retailers, says Colliers International

As high-end retailers around the world are reaching deeper into their pockets to pay rent for their prime-location shops, Canada’s top retail strips continue to lease at bargain rates according to Colliers International’s 2012 Global Retail Report.

Toronto’s Bloor Street, the most expensive location in the country, is the only Canadian retail corridor to appear in the top 50 global list, ranked 34th with an average lease rate of US$310 per square foot. While there was a 3.3 per cent increase from last year, the current lease rate is still only a fraction of the rates per square foot recorded on New York’s Fifth Avenue (US$2,633), Hong Kong’s Canton Road and Queen’s Road, Central (US$1,831), and London’s Old Bond Street. (US$1,602). These streets all experienced double digit growth in average lease rates over last year.

“The lease rates in Canada’s most sought-after retail locations say more about our cities than about the local or global economy,” says James Smerdon, Director, Retail and Strategic Planning with Colliers International. “Canada’s economy weathered the recession much better than other developed countries and our luxury retail sector has never been stronger. The expansion of Holt Renfrew and the expected entrance of high-end U.S. department store chains such as Nordstrom and Bloomingdales are testament to this. With high-buying power potential, some underserved markets and low leasing rates, Canada continues to be a very lucrative destination for retailers, developers and investors in the high-end retail niche.”

Canada’s Priciest Fashion Retail Corridors

As somewhat expected, Toronto’s Bloor Street retained its status as Canada’s most expensive shopping strip, thanks in large part to new leases and expansions by Louis Vuitton, D&G and Tiffany & Co. Vancouver’s Robson Street (US$150 PSF) ranked second, although it experienced the sharpest decline (25 per cent) in average rental rate over the past year, mainly due to transitions of large tenants. Vancouver’s Alberni Street (US$105 PSF), Montreal’s Rue de la Montagne (US$80 PSF) and Halifax’s Spring Garden Road (US$70 PSF) that saw a dramatic 27.3 per cent hike in lease rates, round out the “top five” Canadian list.

Rank	City, Street	Average Lease Rate *
1	Toronto, Bloor   St.	$310
2	Vancouver,   Robson St.	$150
3	Vancouver,   Alberni St.	$105
4	Montreal, Rue de   la Montagne	$80
5	Halifax, Spring   Garden Rd.	$70
6	Montreal, Greene   Ave.	$60
7	Victoria,   Government St.	$60
8	Calgary, Uptown   17th Ave.	$55
9	Vancouver, West   Fourth Ave.	$48
10	Ottawa, Byward   Market	$45

* rates are in USD per square foot

“Looking forward, Canada is developing a Western economic power base with resource-driven economic gains. This drives both population growth and buying power in the Western provinces,” adds David Bell, senior associate, Planning and Retail Consulting with Colliers International. “As retail properties in these growth regions benefit from the economic prosperity and consumers’ higher incomes, the result will be higher sales productivities that will translate to higher lease rates and higher property values.”