Bloor St. W.'s retail renaissance
Rents on the upscale Bloor St. W. shopping strip have doubled in 4 years
Oct. 27, 2006. 06:41 AM
It's no secret Toronto's fabled Bloor St. W., home of retailers such as Prada, Hermes, and Chanel, is centre ice for the Canadian luxury market.
But the area just got a little more exclusive according to a report released yesterday by Cushman & Wakefield LePage, placing it in 22nd spot among the most expensive retail locations in the world, up two spots from the year before.
Thanks to strong consumer confidence, good employment numbers that have boosted demand for luxury goods and a higher Canadian dollar, the coveted retail strip â€” sandwiched between Yonge St. and Avenue Rd. â€” retains its first-place spot in Toronto.
Nationally, Bloor St. W. tied with Vancouver's upscale Robson St. for the honour of the most expensive street in Canada. It costs retailers an average of $208 per square foot for the privilege of being on either street. Only four years ago, rents on Bloor were almost half that price at $110 per square foot.
"If you're a top high-end retailer, this is the place that you want to be," said John Crombie, vice-president and national retail director of Cushman & Wakefield.
Strong consumer confidence and bullish retailers have created demand on the strip, which has virtually no vacancies.
"It's not easy to get on Bloor; there is a real demand for the area," said Crombie, who is currently scouting locations for one international retailer who is looking for 5,000 square feet on the strip.
Mid-market retailers are also targeting the strip, hoping their stores and signage become major billboards for affluent customers.
Last year discount designer store Winners and lingerie company La Senza took prime spots on the strip. International retailers such as Williams Sonoma have been there since 2002.
While there has been some controversy over whether the street will retain its exclusiveness, Crombie said the diversity of stores will offer a broader appeal to shoppers.
"The area has undergone a real renaissance," said Wayne Kingsland, the owner of the Montblanc boutique on Bloor St. "But we have really benefited from being in such close proximity to other luxury stores and hotels. This is where the carriage trade comes to stay and shop."
When Montblanc decided to open its only freestanding boutique in Canada, Bloor St. was the logical location, Kingsland said. "It has been a very important part of our strategy."
The store remains one of the top- performers globally for the luxury goods chain.
Kingsland is celebrating his 10th year on the strip this year, and while his rent may have gone up, so have the prices of some of the offerings in his store.
At Montblanc for example, you can take away a sport diving watch for $25,000, or special-order a diamond-encrusted pen for $250,000.
Still, despite the high rents, Crombie estimates some stores are pulling in more than $2,000 per square foot in sales, making for a robust profit margin.
Other areas in Toronto that are doing well include the trendy Queen St. W. strip, where rents have gone up about 25 per cent over the last year.
But Toronto rents pale in comparison to New York's 5th Ave., which takes the top spot in the survey at the equivalent of $1,505 per square foot.
"It's a totally different situation in New York where it's all about getting the branding with the real estate," Crombie said.
As part of the marketing budget, some retailers will operate at a loss just to be on 5th Ave., where they get visibility and their stores become giant billboards. The halo effect is expected to permeate to other stores down the chain.
In second place is Hong Kong's chic Causeway Bay area at $1,264 per square foot, followed by the Champs Ã‰lysÃ©es in Paris.
The biggest mover this year has been in the Asia Pacific region. New Delhi has seen the biggest rise, up 17 spots to take Toronto's old spot at Number 24, for its average rents of $201 per square foot.