From pandemic restrictions to changing shopping habits, the future of malls looks bleak. But some experts see a hopeful future if malls mimic the blueprint pioneered at West Edmonton Mall, the largest shopping centre in Canada.
Triple Five Group, which owns West Edmonton Mall, was banking on that success with its $5-billion US American Dream megamall in New Jersey.
The 2.9 million-square-foot building boasts entertainment attractions — like a waterpark and mini-golf —- mirroring those of the Edmonton mall. But the pandemic derailed its grand opening in March 2020 and its capacity has been curtailed since its delayed opening in October.
But that mall-as-entertainment blueprint should work out for American Dream in the post-pandemic long run, according to Mark Faithfull, a retail analyst based in London, England.
“I think we’ll see a lot of big shopping centres performing quite strongly,” he told CBC’s Edmonton AM. “Personally, I’m actually pretty confident about their future.”
Edmonton AM6:36Bad luck for Edmonton’s shopping centre family
Other malls should be taking note, he added.
Across North America, malls are seeing hard times. According to Moody’s Analytics, the estimated vacancy rate for regional malls in the United States could reach a high of 12.7 per cent in 2021, up from 10.5 per cent in the fourth quarter of 2020. Meanwhile, Canadian data solutions company Altus Group says the rental market is predicted to decrease by five to 10 per cent in top-quality malls, and by more than 10 per cent for lower-quality malls.
At 5.2 million square feet, West Edmonton Mall has an indoor waterpark, an amusement park, a golf course and a sea-lion show. In the past three years, the mall has opened some high-profile retail stores including French brand Louis Vuitton and popular Japanese fashion brand Uniqlo.
Faithfull said shopping centres that pivot to becoming a multi-use, entertainment centre will give people reasons other than shopping to go to malls in the future.
John Pracejus, director of the school of retailing at the University of Alberta, agrees.
“That does seem to be something that is likely to increase in the future, whether that’s the kind of entertainment that’s the kind at West Edmonton Mall with waterparks and roller-coasters and things like that,” he said.
“The other trend that you see is that there’s some activities that we don’t typically think of as taking place in malls that may increase. So, for example, the Edmonton public library now has a branch in the (Londonderry) mall and you might start seeing things like that.”
And although massive attractions of West Edmonton Mall may not be viable for every mall in Canada, even things like restaurants, leisure centres and bars will generate more foot traffic.
Both Faithfull and Pracejus note that retail-only malls that are currently struggling may continue to decline.
In fact, Faithfull said that the pandemic only sped up the process for many malls that were doomed to go under due to a shift to online shopping in the past decade.
“We’re seeing things accelerated at 100 miles-an-hour,” he said.
Faithfull said once people are vaccinated and things start to go back to normal, it will likely be three to four months before shopping centres start bouncing back.
“We’ll start to see whether some of those trends during the pandemic are longer-term or whether they were just a reaction to that the people couldn’t get out and about,” he said.
View original article here Source