Winnipeg a port in the storm

April 6, 2009
Winnipeg Free Press
Written by: Murray McNeill

National retailers still confident in city

Winnipeg is seen as a safe port in the economic storm, and that has new retailers still sailing into town in spite of the global recession, industry officials say.

One of the newest arrivals is Golf Town's 19,000-square-foot, big-box store that opened last Thursday in the Kenaston Common retail power centre at the corner of Kenaston and McGillivray boulevards.

Although that leasing deal was signed before the recession hit last fall, a local Golf Town official said it would have gone ahead even if the recession was already underway.

Kevin Giesbrecht, the company's regional vice-president for the Prairies, said not only is Winnipeg a good retail market to be in right now -- its other store near Polo Park is doing a booming business -- but the recession hasn't eroded the demand for golf gear. If anything, it's added fuel to Golf Town's retail fires.

"During difficult times like these, people are looking for outlets (for their stress), and golf is one of those (outlets)," he said.

And Golf Town isn't the only national retailer that's still high on Winnipeg, according to two local commercial leasing agents.

"I talk to all of our national retailers... and Manitoba is, without question, one of the best places in the country right now as far as retail sales are concerned," said John Pearson, a commercial real estate broker/developer with Shindico Inc./IC&I Properties. "All of the major retailers speak highly of Winnipeg."

He said while sales are down significantly in places like Ontario, Alberta and British Columbia, in Manitoba they remain either flat or down only slightly from a year ago, when the Canadian economy was still humming.

Pearson said he's still amazed at how quickly he was able to find a replacement tenant for the former Linen 'n Things store on St. James Street. The U.S.-based retailer pulled out of the 34,000-square-foot space in late December and by the end of January, Home Outfitters was signed up to take its place.

Ken Yee, senior executive vice-president of Cushman & Wakefield LePage Brokerage Services, said Cushman also hasn't had any trouble finding retailers to fill what little undeveloped space is still left in the 450,000-square-foot Kenaston Common development.

"We have not seen a fall-off (in leasing activity)," Yee said. "We continue to chug along at the same pace."
Besides Golf Town, Yee said he's got three local retailers -- he wouldn't say who -- signed up for another 13,000-square-foot building that's under construction. And he's got two others who are interested in another 5,000-square-foot stand-alone building that's in the works for this year.

Yee said it doesn't hurt that furniture giant IKEA is going to be an anchor tenant in the proposed Tuxedo Yards Redevelopment project that's planned for the corner of Kenaston and Sterling Lyon Way. "These retailers know that that's basically going to be the golden mile (for retail) from Sterling Lyon to McGillivray. So they want to be there."

Spokesmen for the two companies planning to redevelop the former Winnipeg arena/CTV properties at Polo Park -- Cadillac Fairview Ltd. and Shindico Inc. -- said the recession also hasn't scared off any of the prospective retail tenants with whom they've been negotiating.

"The recession hasn't hurt us unduly," Farley McEwan, Cadillac Fairview's vice-president of development, said in an interview. "We have not lost a single prospective tenant because of it."

He conceded they still don't have anyone signed up for their Polo North retail/office development, which is expected to include up to nine retailers. But that's because negotiating leases with international tenants is a long and arduous process.

"It's still possible to put together new deals, but it is more challenging."

Shindico president Sandy Shindleman said he remains optimistic Shindico will find tenants to fill both the Polo North development and Shindico's proposed Reenders Festival shopping centre development near Kildonan Place Shopping Centre. That one could include up to 30 retailers.

"As soon as tenants are in the mood to do something... we'll be ready to move," he added.

murray.mcneill@freepress.mb.ca

Filling the void

WINNIPEG developers are still finding retailers to fill vacant space in spite of the recession:

• Golf Town -- Officially opened its second local big-box store last Thursday in the Kenaston Common retail power centre at Kenaston and McGillivray. The new 19,000-square-foot outlet compliments the 17,500-square-foot store the national chain already had near Polo Park.
• IKEA -- International furniture giant announces plans to open a 350,000-square-foot store in the Tuxedo Yards Redevelopment project at the corner of Kenaston and Sterling Lyon Way. Store is expected to open in 2012 or 2013.
• Home Outfitters -- Opening its third Winnipeg outlet May 7 in the 34,000-square-foot store at 710 St. James St. that Linen 'n Things vacated in late December.
• Original Joe's -- The Calgary-based bar and grill restaurant chain is scheduled to open its first Winnipeg outlet this spring in the former Grapes location at the corner of Kenaston Boulevard and Grant Avenue.