This is a response piece to The Real Estate News EXchange’s article: Storefront, Ivanhoé Cambridge Partner on Pop-up Retail. Full article linked below.
The “AirBnB of Retail” is making its way into the Canadian market and as the representatives of both retailers and landlords, the value of an online marketplace like Storefront is indisputable. Whether it’s a national tenant needing a product launch location, or a landlord desiring increased traffic in their shopping centre, both parties stand to profit from engaging with the platform.
For retailers looking for short term space, Storefront provides a solution to the often high transaction costs of hiring real estate agents and lawyers. By lowering the transaction cost, a short term deal becomes a more viable option. Additionally, the use options for retailers are numerous; including, but not limited to, “new product launches, special events or promotions, [as well as] experiential activations that showcase the brand and increase visibility.”
The platform will derive value for landlords by drawing customers to their location, decreasing vacancy and the negative perception that accompanies it, as well as creating the potential to secure a long-term option, contingent on the rental rates being comparable to neighbouring spaces.
Speaking on the success of their partnership with Storefront, Director of Business Development at Ivanhoe Cambridge, Janine St. Pierre, “cited a recent example of House of Marley and its headphones, earbuds and audio products, which were a new product category at Vaughan Mills.” She elaborated; “It was a vehicle for them to share their brand story and make a personal connection with shoppers that would extend past their pop-up, which was a month-long initiative. It was a success for them but it was also a win overall for our shopping centre.”
Despite the high level of optimism surrounding the rollout of Storefront in Canada, the launch does not come without reservations. Some of which include:
- The model will only suit built out space. Amortizing the cost of construction for a fixturing period would likely be impossible.
- Due to the short term nature, the expected lack of capital invested by the tenant to create an appealing space could reflect poorly on the centre.
- When selling a shopping centre with short term tenants, potential buyers would likely negate the value of the tenancies, creating a reduction in the optimum sale price.
All things considered, we are keen to follow the results of their initial trial in the Canadian market and see how the model might translate to street-front locations and open-air shopping centres.
To read the full article referenced in this piece, please visit: https://renx.ca/storefront-ivanhoe-cambridge-sign-pop-up-retail-deal/
Photos via Storefront.