Richard Crenian, President ReDev Properties Ltd

Research shows that Canadians are increasingly purchasing products through their computers and mobile devices. According to Forrester Research, Canadian consumers are expected to spend $39-billion online by 2019 €“ representing 9.5 per cent of all retail purchases in the country, compared to six per cent in 2014.

Growth in e-commerce might appear to be a threat to traditional bricks-and-mortar retail and, accordingly, to the profitability of investing in retail properties. However, Canadians are expected to continue to embrace the in-store shopping experience, particularly in certain retail areas. In addition, many retailers with physical storefronts are integrating e-technology into the shopping experience.

All the signs point to continued strength for traditional retailers and strong growth opportunities for commercial retail property investment, says Richard Crenian, president of ReDev Properties Ltd.

ReDev Properties is a Canadian-owned and operated commercial real estate asset management company, which has purchased and managed over 30 commercial real estate properties in Canada since 2001. Many of the company's properties contain neighbourhood shopping centres, which Mr. Crenian describes as excellent for investment.

"I think the neighbourhood shopping sector is a good one to be in at present because they are dealing primarily with services and essential goods €“ be it food, haircuts, cheaper restaurants and important services like doctors and dentists," he says. "Neighbourhoods can only exist if they have the key services nearby, as they cannot be bought online."

According to Mr. Crenian, his company's portfolio of convenience-focused shopping plazas in mature neighbourhoods provides a measure of defence against e-commerce trends that could threaten physical storefronts.

"The changes taking place are principally affecting the chains and not the locals as much, he says. "If you look at what is most frequently purchased online, such as movies, music and books, these are not the type of retail outlets we have in our plazas, so we are pretty sheltered."

At the same time, he explains, ReDev Properties recognizes the importance of helping local merchants understand the value of participating in online activities.

"We will provide high-speed Internet access, so they can do email blasts and engage with their customers.

"Even restaurants on their menus now will advertise their Wi-Fi passwords to encourage customers to share pictures of the meal on social media. Part of our job as a landlord is to counsel tenants on using a combination of online and physical sales."

In Mr. Crenian's experience, e-commerce can strengthen traditional retailers, but the in-store experience continues to draw customers, particularly in neighbourhood malls.

"We like to have a good mix of local tenants, and people generally get out and support their local tenants in person or recommend to their friends," he says. "Word-of-mouth is a very strong marketing tool in this sector; it is the properties with the big chains that are most prone to pressures from online purchasing."

Mr. Crenian's assessment is supported by a recent report from the Canadian Internet Registration Authority (CIRA). The CIRA Internet Factbook for 2016 states, "While e-commerce continues to grow, it would be overly simplistic to assume this is happening at the expense of traditional retail.

"In many cases e-commerce has been added to the traditional retail experience €“ creating new digitally-enabled shopping experiences."

Leave A Reply

Skip to content