Keeping Local Dollars in Surrey

Guildford Town Centre | BCBusiness
The Guildford Town Centre is just one of Surrey’s shopping centres expanding and diversifying to keepthecashlocal.

Surrey’s shopping centres expand to keep local consumers spending closer to home

Last month, Guildford Town Centre finished a three-year renovation making it one of the largest retail centres in the booming South Fraser region—and, if regional traffic trends play out as anticipated, one of B.C.’s busiest, too. By 2025 the South Fraser region will have another million people, says Anita Huberman, CEO of the Surrey Board of Trade. “With the possibility of the Patullo Bridge being tolled and tolls on the Golden Ears Bridge and new Port Mann, people want to be able to shop at home.”

But being sidled against the border and the competition from perceived cheaper U.S. prices, plus the more diverse shopping in Vancouver and Burnaby, retail in Surrey is a tough fight, with the need for decisions over what Surrey wants its shopping experience to look like.

Retail renovations are the rage all over Metro Vancouver: Brentwood Mall in Burnaby, Park Royal in West Vancouver and Canada Line-adjacent Oakridge all have major redevelopments in play: less indoor space, mixed-zoning commercial space and residential expansions are all common traits. Developers are renovating enclosed shopping centres to keep up with demand for Lower Mainland storefront from retailers, says Brent Heed, senior associate for retail at Colliers International. Vacancy rates across Metro Vancouver are low: 3.4 per cent in the region, 2.2 per cent in regional centres and 0.89 per cent in big-box areas.

Guildford Town Centre’s $280-million expansion is one of the largest mall redevelopments underway in Canada, according to property management company and developer Ivanhoé Cambridge. Built in 1966 by British developer Grosvenor-Laing as the then newly built Port Mann bridge and Trans-Canada Highway turned Guildford’s rural acreages into commuter sprawl, the mall was created for the freeway. With Woodward’s as its original anchor tenant, the mall became the Fraser Valley’s foremost shopping destination.

Purchased by Ivanhoé Cambridge, the parent company of Metropolis at Metrotown, Oakridge and Nanaimo’s Woodgrove Mall, it held its title as B.C.’s second-biggest shopping centre by square footage, attracting a peak of 12.5 million visitors per year. But by 2008, Guildford was in the sticks. “Focus groups told us shoppers were going over the bridge because we didn’t have the brands they wanted,” says Peggy White, general manager of Guildford Town Centre. Guildford’s sales per square foot and lease rates are on the lower side, says White, who points to the mall’s nine-year wait for a redevelopment.

By the time construction is completed next year, the mall’s gross leasing area will have increased from 980,000 square feet to 1.2 million, making it the largest shopping centre between Metrotown and West Edmonton Mall. White hopes that tenants like Disney, Aritzia, H&M and Forever 21 will help woo shoppers over the Port Mann, not to mention the abundance of new parking space. According to Heed, there may even be an Apple store.

Surrey, Delta, Langley and Abbotsford all have major retail redevelopments in the works, which will add two million square feet in new capacity. And it’s not all traditional enclosed malls, either. Vancouver’s Larco Developments based Morgan Crossing, its mixed-use South Surrey shopping centre, after West Vancouver’s Park Royal Mall street-front expansion: a pedestrian-friendly complex with street-facing stores and a mix of high-end outlets, restaurants and condominiums. Guildford Town Centre’s owner, Ivanhoé Cambridge, is also behind the proposed 1.1-million-square-foot Tsawwassen Mills Mall and adjacent 550,000-square-foot Commons Power Centre on the Tsawwassen First Nation’s land.

But the rise of the Canadian dollar and higher cross-border duty-free caps have hurt retailers at Guildford Town Centre, says White. The mall saw 11.2 million visitors last year, down a million from its pre-recession peak. “We can see it clearly on Black Friday,” says White, pointing to B.C. shoppers who go south before the holidays in search of deals. According to the Surrey Board of Trade, Morgan Crossing has seen six stores close due to decreased walk-through traffic and a lack of business. “We’re a border city [and] we’re always influenced by the draw of consumers across the border,” says Huberman.

If you look at comparable properties, it’s generally less expensive for retailers to open up shop in the Fraser Valley, says Heed. “Guildford will always have a decent draw.” But Surrey’s oldest—and biggest—mall is aiming higher, to increase its annual visitor traffic to 20 million annual visitors, ranking it as one of Canada’s five busiest malls.