[NorthernDancer]

https://www.thestar.com/business/201...y-survive.html

Why Canada's top tier malls thrive while local malls barely survive

Blake Hutcheson, CEO of Oxford Properties, wakes up every morning thinking about how to outthink, outpace, outdo Cadillac Fairview, headed by his friend and competitor, John Sullivan.

“It’s like playing in the NHL. You put your jersey on and fight the hardest that you can fight and then you have a beer after the game,” Hutcheson said.

Sullivan gets up thinking how to beat everyone, including Oxford Properties and Amazon.com.

“Nobody owns more high-quality retail malls in this country than we do. That obviously puts us in position ‘A,’ but it also means everyone is also trying to knock us off that perch,” Sullivan said.

Hutcheson and Sullivan operate at the top of the retail real estate sector in Canada, each one in charge of a multibillion-dollar empire operating on behalf of a large pension fund.

If you’ve shopped at a top-tier mall in Canada, it was likely owned by Oxford or Cadillac.

While neighbourhood malls are struggling to attract tenants and shoppers, top-tier malls like Yorkdale, an Oxford property, and Toronto Eaton Centre (TEC), a Cadillac Fairview property, are raking in profits.

Productivity, measured in sales per square foot, was $1,651 at Yorkdale for the 12 months ending Aug. 31 and $1,488 at TEC, according to a Retail Council of Canada report.

Malls at the bottom of the ladder, meanwhile, struggle to ring up sales of $325 per square foot.

Abandoned malls — sometimes called zombie malls — are becoming a problem in the U.S. Last summer the mayor of Akron, Ohio, asked residents to stay clear of the Rolling Acres Mall, which has been boarded up for years, becoming the site of crimes ranging from trespassing to a possible murder.

Hutcheson does not believe Canada will see the widespread mall closures taking place south of the border because Canada is materially under-retailed vis-à-vis the U.S.

Industry estimates peg the amount of mall space in the U.S. at 25 square feet per person, whereas in Canada it's closer to 15 square feet per person.

Hutcheson believes people still want and need to be in social environments, which malls provide.

“Malls aren’t going away. So let’s take that off the table,” Hutcheson said.