If you are considering expanding your specialty leasing business, you need to consider Canada. By all accounts the country’s specialty leasing operations are booming and new ideas and concepts are always welcome. Duffy C. Weir


Specialty retail in Canada Ivanhoe Cambridge Company, one of Canada’s premier developers and managers of retail real estate, headquartered in Montreal, has a strong and successful specialty leasing program. This well regarded program is the work of Suzanne Cayley, vice president of specialty leasing and partnerships who operates out of a regional office in Toronto. Cayley manages programs coast to coast in Canada. She is also responsible for two programs in Europe—Madrid Xanadu in Spain and St. Enoch Centre in Glasgow, Scotland. In Canada, three regional managers and specialty leasing and partnership managers have oversight for one to three centers. Cayley operates one of the largest programs in North America with 45 centers and nearly 600 units in the common area. She says Canadian specialty leasing is different compared to


many U.S. operations. For one thing, she says, the Canadian centers are substantially smaller in size than U.S. properties. Also, “Canadian developers don’t increase or decrease the number of units in the common area, like they do in the U.S.,” Cayley points out.


Keeping it fresh Ivanhoe Cambridge centers have an average of 12-14 units in each property. Year round, each program’s occupancy averages over 92% and produces between $1.5-$2 million Canadian dollars. She wants to mandate a high turnover rate to keep things fresh. “We will ask ourselves: if we had to start our program all over again, what would we do? I think that we have lost sight of the purpose of specialty leasing—which I believe is to introduce and provide new opportunities for new concepts and new retailers to be part of a center. We are so focused on achieving the bottom line that it is really easier to just renew the current tenants to ensure that we are fully leased and thus we are shutting out new concepts. If we mandate a 30-50% turnover rate, then


we allow a ‘new’ shopping experience for our customers and that makes the experience of shopping the specialty tenants fun again,” Cayley says.


Keeping it legal Ivanhoe Cambridge is mindful of all permanent lease restrictions—especially those spelled out by American retailers like Bath & Body Works and Victoria’s Secret, and Cayley’s team works diligently to honor these limitations. “Our permanent tenant mix and the uniqueness of our shopping centers drive the bus,” Cayley says. She adds that the company is looking at merchandising that enhances the shopping center. Cayley expects a greater focus on sponsorship in the future. In Canada, specialty leasing legal agreements are similar


to those in the United States. For merchants who wish to do business in a center for up to one year, Cayley uses a temporary occupancy agreement. For partnership and or sponsorship transactions, Ivanhoe Cambridge centers use a license agreement with a longer term limit. In addition to rent and standard percentage rent, Ivanhoe Cambridge charges each merchant a “promotion fund” fee that covers the marketing costs for merchant listings in websites, directories and in-mall signage. The portfolio currently has partnership deals with Coke (vending), OneStop Media/Paddison (digital posters) and Clear


SpecialtyRetail.com


Winter 2011 n Specialty Retail Report


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