At Bramalea City Centre in Brampton, Ont., a former retail big-box store was leased to recreation business Activate. The mall’s owner Morguard Investments Ltd. wants to see more recreation centres in its 17 Canadian malls.Courtesy of Morguard Investments Limited
Canadian malls have long featured recreation facilities – gyms are everywhere, and West Edmonton Mall’s waterpark has been a draw since the mid-1980s – but the recent launch of numerous, elaborate recreation centres in shopping complexes large and small points to a fast-evolving trend, insiders say.
“Entertainment has become a necessary part of the shopping centre experience,” says David Wyatt, senior vice-president of retail at Morguard Investments Ltd., which owns or manages 17 malls across Canada.
Last September, Morguard’s Bramalea City Centre in Brampton, Ont., launched Activate, a 13,000-square-foot gaming facility where groups play life-sized video games, dodging and blasting through 11 different competitions that challenge agility and problem-solving.
At the company’s Cambridge Centre in Cambridge, Ont., a vacant Target store was transformed in 2018 into a massive Kingpin, where customers can play laser tag, throw axes and more.
And early next year should see the development of e-kart racetracks at two of the company’s malls (the names of which will be announced next month, Mr. Wyatt says).
Mr. Wyatt says he is working with four-year-old Canadian startup Activate (which claims to be the world’s first active gaming facility and is developing its 10th location) and Kitchener, Ont.,-based Bingemans, which owns Kingpin, to bring these amusement centres to more of its mall properties.
He says he’s noticed an increase in mall competition for these types of entertainment concepts.
“More users are looking. The market is growing.”
Mr. Wyatt adds that as more U.S. malls embrace everything from indoor skiing and skydiving facilities to pickleball courts and golf ranges, Canadian mall owners are taking note.
“A lot of times in retail, we see innovation in the U.S. and then it migrates to Canada,” Mr. Wyatt explains.
Morguard first introduced entertainment at its shopping centres with Cineplex cinemas. But popular options now “are more interactive so people can get physically involved. They just don’t sit and watch. And that’s exciting for everyone.”
By drawing more footfall and new retail tenants aiming to capitalize on it, the increase in recreation centres is benefiting shopping centres, says Susan Thompson, associate director of research at global real estate brokerage firm Colliers.
Owners want to create an environment where all of the different parts work together, so people who come to be entertained will participate in other mall offerings.
— Susan Thompson, associate director of research at global real estate, Colliers
According to Colliers’ recent Canadian Retail Outlook report, “retail rents reached record highs for most enclosed centres” in the first quarter of 2023, while “vacancy rates dropped nationwide.”
Average retail vacancies hover between just 4 per cent and 9 per cent, depending on asset class, and rents range from $17 to $37 a square foot, according to the report.
Ms. Thompson says that even given the Canadian closing announcements for U.S. retail giants Bed Bath & Beyond and Nordstrom, rising interest rates and a slowing economy, “the market has proven its underlying resilience and willingness to embrace change.”
This change “definitely includes the introduction of a wider array of entertainment and recreation coming into shopping centres,” Ms. Thompson says. “Owners want to create an environment where all of the different parts work together, so people who come to be entertained will participate in other mall offerings.”
QuadReal Property Group, which owns 13 malls across Canada, launched a massive indoor bike park at its Capilano Mall in North Vancouver in June.
North Shore Bike Park, said to be the world’s first indoor bike park, took nine months to build and required new zoning.Courtesy of North Shore Bike Park
North Shore Bike Park’s indoor environment lets cyclists ride not only during the cold off-season 'but also during summer heat waves,' says Ed Johnson, co-owner and commercial director of North Shore Bike Park.Geoff Livingston
Chrystal Burns, QuadReal’s executive vice-president of retail, says recreation concepts at malls have become “a deep trend” representing “a structural shift in how we are consuming and how we want to see our spaces and places used.”
With Canadian consumer spending on services and experiences outpacing spending on goods, Ms. Burns says QuadReal aims to feature recreation amenities at every one of its malls. The company is on its way to that goal with such facilities as Goh Ballet school and Hammam Spa at Toronto’s Bayview Village and the new pickleball courts by Toronto’s trailblazing Fairgrounds club – at Cloverdale Mall in Etobicoke, and Assembly Park in Vaughan.
To develop the North Shore Bike Park – said to be the world’s first indoor bike park at a mall – QuadReal partnered with the facility’s 10 North Vancouver owners to ensure successful rezoning and building permits and negotiated a lease for the tenants of the former Sears space.
“We really win when our tenants are successful,” Ms. Burns says. “In terms of lease structure, we’ll provide relief in the beginning of the term with increases over time as their business grows.”
QuadReal’s assist in marketing led to discount cards for park patrons to redeem at other mall retailers – a bonus for parents who drop off kids and then go shopping, Ms. Burns says.
North Shore Bike Park’s all-wooden structures can’t compare to the popular bike trails in the mountains just a few kilometres north of Capilano Mall. But the 65,000-square-foot space’s indoor environment lets cyclists ride its flowy, jumpy terrain not only during the cold off-season, “but also during summer heat waves,” says Ed Johnson, North Shore Bike Park’s co-owner and commercial director.
Mr. Johnson says locating the bike park in a mall was always the intention.
“It makes sense for us,” Mr. Johnson says. “There’s already footfall, food and drink offerings, parking, and it’s a known location that people can get to.”
In terms of the size of buildings they require, and scaling the business, “we really saw an opportunity in all the shopping centres’ vacant big-box spaces,” he adds.
“Often these sites are what used to be a hub of a local community, so it’s also a way of returning them to that former glory.”