Even with Target headed towards its ultimate departure, Canada remained a top destination for global retailers in 2014. The eighth edition of CBRE’s How Global is the Business of Retail? tracks the movement of the world’s top 334 retailers in more than 160 cities and indicates that Canada is one of the top 10 destinations for retailers looking to expand and Toronto is the most targeted city in North and South America.
After falling out of the rankings in 2013, Canada ranked 8th when comparing new retail entrants on a national basis. A total of 31 new retailers set up shop in Canada for the first time in 2014, while Japan led with 63 new entrants. An analysis of specific cities revealed that Toronto attracted 25 new retailers, ranking 12th in the world. This is the highest ranking for a Canadian city in the CBRE survey and Toronto recorded more new retail openings than any other city in North and South America last year. Toronto also outpaced fast growing, emerging markets like Manila and Istanbul.
“This result should bolster the confidence of landlords and retailers in Canada who faced some tough questions in the wake of the failed Target rollout,” said Ross Moore, Director of Research for CBRE in Canada. “While competition in the Canadian retail market is fierce, major global brands have opened some of their most profitable stores in Canada. Many of these openings were planned well in advance of recent events, but it’s only natural that other retailers will try to replicate that success. We are already tracking 27 retailers who intend to open in Canada in 2015.”
Cities in Asia remain a priority for retailers, with Tokyo, Singapore and Taipei amongst the top five most targeted cities in the world; however, Toronto was one of five new entrants on the list along with Doha, Manila, Stuttgart and Istanbul. As global economic growth continues to ramp up, retailers will be more willing to venture into new markets and pursue areas of opportunity.
“Toronto is unique in that it appeals to a wide variety of retailers due to the diversity of the population, relatively stable economy and high disposable income,” Moore noted. “Toronto remains the gateway city for retailers looking to establish a Canadian presence and residents of Vancouver and Montreal can expect major brands to expand into their markets thereafter.”
The Luxury and Business Fashion sector led retail expansion efforts in North America, followed by Mid-Range Fashion and Specialty Clothiers. Versace, Nordstrom, Muji and Agent Provocateur are just a few of the retailers that opened stores in Canada last year. Bloor Street and Yorkdale Mall have maintained their appeal with major brands looking for their first location in Toronto; however, the redevelopment of other regional malls in the Greater Toronto Area has increased the number of options for global retailers. Overall, Canada’s retail vacancy rate remains low and retail sales growth rebounded in February according to Statistics Canada.
“For some, the bloom may have come off the rose, but it’s still a rose and Canada’s retail market is strong by most standards. Canadian cities will continue to appeal to a broad range of global retailers,” said Moore.