This Montreal developer is expanding retail centres as little new space is added (dispo en anglais)
19 août 2025
As retail space construction across Canada slows due to rising building costs, higher interest rates and general economic uncertainty, one Montreal developer has found that expanding existing properties offers a way to meet increasing demand from growing retailers and turn a profit.
New store builds can be lucrative if retail space is added at existing malls and centres, argued Dean Mendel, cofounder of Montreal-based Forum Group.
Adding store space at established properties enables developers such as Forum to avoid potential bureaucratic roadblocks during the permitting process because zoning permissions are usually already included, Mendel said.
The developer described the process of obtaining municipal permits to create new retail projects as “incredibly brutal.”
“Typically, when the stores are on existing properties, you already have the city on board in terms of what you’re trying to accomplish,” Mendel said. “It is still very difficult to get approvals for a new site, but when you’re just adding onto an existing facility, it tends to be much less painful.”
The cost of construction has risen sharply in recent years, but the scarcity of available retail space has pushed rents up at a faster than average pace, allowing added-on retail areas to be profitable, Mendel added.
“What makes me bullish is the rental rates that you are able to achieve today are quite a lot higher than even three years ago,” he said.
Available store space has become increasingly hard to find. The overall retail vacancy rate in Canada is 1.8%, according to CoStar Market Analytics. About one in 25 Canadian storefronts is empty, and retail rents have shot up due to constrained supply, according to CBRE data.
Canada's surging population growth has ensured that retail foot traffic has remained active despite murkier economic conditions, according to a CoStar report on the Canadian retail market.
"The days of developing standalone retail centers are largely over, which, in part, is why retail construction starts (are expected) to remain well below their long-term averages as of early 2025," CoStar said in a report. "Just over 7 million square feet of new retail space is currently under construction across Canada. Much of this supply involves the redevelopment of existing retail or retail additions to mixed-use properties."
Forum Group's is working to expand its Contrecoeur Market northeast of Montreal. Building shopping centres has become 'incredibly brutal,' developer says.
New space preleased
Forum has several retail expansions underway on sites that adjoin its existing grocery-anchored retail outlets. Almost all of the planned shop space is preleased. The stores are being built on adjacent areas and will not require sacrificing parking spaces to make room for them.
Forum has the bulldozers out at its Buckingham, Quebec property near Gatineau-Ottawa. “Unfortunately, when you buy a site, it doesn't come in the size you want or you need, so you end up carrying some residual land over a large period of time, typically five to 10 years,” Mendel said. Forum’s retail properties are located in smaller cities around the province of Quebec, and work is either in progress or planned to begin soon on its properties in Saint-Lin, Saint-Antoine, Saint-Canut, Contrecoeur, Lévis and Buckingham.
Forum is a development company founded in 2018 and backed by principal Paul Schacter. Along with its Montreal office, the firm has an office in Edmonton that's led by Jay McMartin and another in Burlington, Ontario, headed by Toby Singlehurst.
The company plans to build housing on some of its shopping centre properties, having obtained zoning permissions during the pandemic to allow for the use. The residential projects are relatively small, ranging from 75 to 200 units. Forum said it aims to build the homes over the next five to 10 years. “There is demand for purpose-built rental housing in a lot of these secondary and tertiary markets, as the people who lived there have lived there for a really long time, so you have an opportunity to keep the 55-plus crowd in the market when they downsize and want to stay in the same market," Mendel said. "There is a lot of demand.”
Read the full article that was published in Costar