New Horizon Mall investors attracted by unique store ownership business model
Investors say they aren't worried about Alberta's struggling economy and low oil prices
The Canadian Press
Dan Healing
23 June 2016

An artist's rendering of the New Horizon Mall, which will have space for more than 500 stories. It's expected to open late 2017. (Supplied)

Investors spending hundreds of thousands of dollars to buy retail shop space in a new Asian-style mall just north of Calgary say they aren't worried about Alberta's struggling economy and low oil prices.

Investors and dignitaries gathered Thursday in a field near the main highway between Calgary and Edmonton to officially break ground for the $200-million New Horizon Mall expected to be completed by late 2017.

condo units

The project differs from other Alberta malls in that most of its more than 500 stores are being sold to individual investors who can then lease them to others or take over the space themselves. About 90 per cent of the space available to investors has been sold.

Larger stores for anchor tenants — accounting for about 30 per cent of the 320,000 square feet total — are being held by the developer.

Most malls in Canada are owned by property management companies that lease the space to retailers.

Twenty-seven-old hair stylist Eman Kherfan of Calgary says she is using savings and proceeds from a residential property investment to help buy a $370,000 unit near the entrance to the mall.

She says she hasn't decided whether she'll bring in a tenant or set up her own hair-styling shop, but she is confident her investment will pay off.

Groundbreaking for the new mall took place at a ceremony Thursday. It's expected to be complete by late 2017. (Mike Spenrath/CBC)

"When it comes to the economy, I feel like it doesn't affect people that much when it comes to shopping and that kind of stuff. People are still there, people are still spending," she said.

he's investing about $1 million to buy two food court locations

Calgary businessman Naser Abdo says he's investing about $1 million to buy two food court locations: a 350-square-foot space suitable for a tenant that needs a kitchen and an 85-square-foot spot for a snack or juice bar.

"The location is great ... and I really like the concept, you know, the fact you can own your own," he said, adding he had a market study done and is confident the mall will prosper thanks to its location on the highway and near the regional CrossIron Mills shopping centre.

Investors in the new Asian-style mall just north of Calgary say they aren't worried about Alberta's struggling economy and low oil prices. (Mike Spenrath/CBC)

New Horizon Mall has also attracted attention from former oil and gas workers.

Monika Swiderski and Amy Boers are both accountants who were laid off from energy company jobs in downtown Calgary in the past year.

They have pooled their severance money to buy a 350-square-foot space in a high-ranked area near the escalator and close to a performance stage for about $500,000.

"We just think this is a unique investment opportunity. Where else would you own a piece of a big shopping mall?" said Swiderski, adding she doesn't know yet who their tenant will be.

She said the budding entrepreneurs have also purchased a gelato franchise to be opened in July at CrossIron Mills.

modelled on his company's Pacific Mall in the Toronto area

Eli Swirsky, president of Toronto-based The Torgan Group, says New Horizon Mall is modelled on his company's Pacific Mall in the Toronto area that opened about 20 years ago. He says the malls are designed to be more like an Asian or European bazaar than a traditional shopping centre.

Retail analyst David Ian Gray of Vancouver-based DIG360 Consulting said he thinks the concept of multiple owners will start out well, but could ultimately lead to a lack of a coherent theme in the mall as the original owners sell their spaces.

Swirsky said that's not a bad thing.

"This mall, whatever is going to happen Day 1, it's going to be different a month later, six months later," he said. "The difference between this mall and a normal mall or mainstream mall is that the owners of the stores, they determine each day what works for them and what they think is popular."

He said the mall will likely open with many cellphone stores, electronics shops, jewelry boutiques, and ethnic spices and fashion retailers. But what happens then is largely up to the shop owners.

New Horizon Mall sitting mostly empty following summer opening
CBC News
Dan McGarvey
20 September 2018

Stores at the New Horizon Mall sit empty. (Dan McGarvey/CBC)

A trip to the New Horizon Mall makes for a lonely, if not slightly post-apocalyptic, experience.

The mammoth mall was billed as a modern, international bazaar with an Asian flavour, opening quietly this summer just outside Calgary, south of the CrossIron Mills megamall.

But of its 517 retail units, only nine — less than 2% — are currently occupied and open for business, despite the mall being open since June.

A Korean cosmetics store was the first to open but since then only eight others have followed. The rest of the immaculate glass-fronted retail units sit empty, most displaying 'for lease' signs.

It's a difficult task to stumble on one of the occupied stores in the vast 320,000 square-foot mall, where the only sounds are the whir of redundant escalators or a realtor giving a hushed tour to a worried-looking prospect.

There are hundreds more for lease signs than shoppers at the New Horizon Mall north of Calgary but businesses remain optimistic about the mall’s future. (Dan McGarvey/CBC)

It's not the start business owners envisaged but most remain upbeat about the mall's future.

"It takes merchants time to realize that this is the opportunity that will pay off soon," said Mirza Tahir, who set up a print shop in the mall.

"As the mall gets filled it will become everything that we thought of before we got into business. It's going to grow but you have to have a lot of patience and you've got to go with it," said Tahir.

"If you quit too early you could get out and give it back and five years down the road it will cost you more to get back in," he said.

Nearly every retail unit in this mall is privately owned, rather than the more commonplace model where stores lease space from the mall's owners.

Earlier this summer the mall said it was 99% sold. Now it just needs businesses to breathe life into it.

its eerily empty food court

The mall also needs to attract 27 food businesses to its eerily empty food court, complete with an expanse of gleaming new tables, chairs and garbage units.

Sabi Mattu is the latest to open up shop at the mall adding a perfume boutique to the mix. He feels the mall will eventually come good with more and more businesses opening their doors.

"I'm excited and today we held a mini celebration," said Mattu, who even flew in a holy man from India to perform a spiritual blessing in his store to bring good luck and success as he shared the moment with family members.

"I know I won't be alone and next month there will be 50 shops opening and in another month 100 so it will take time but it will be good," said Mattu.

Others that didn't want to be interviewed on the record spoke about their frustration at what they see as a lack of action, promotion and marketing by the mall's management.

he's shocked and angry about how empty the mall is

One owner said nobody had been in his store to make a purchase in five days. Another already paying rent on a unit yet to open says he's shocked and angry about how empty the mall is months after opening.

The mall was supposed to hold its grand opening event late in October. That event has now been pushed back to an undetermined date in 2019.

"I don't know exactly what month it will be but it will probably be geared toward next spring," said an upbeat Jason Babiuk, General Manager at New Horizon Mall.

"We've got another 40 to 50 build outs that we're doing right now and nothing but positive responses from our current owners and a lot of the public that come in here," said Babiuk.

"CrossIron Mills across the street took approximately three to three and-a-half years to get their mall full," he said, adding some owners are still deciding what types of business to open.

The mall is replacing its grand opening with a fall festival event on October 27th to try and raise its profile.

Babiuk says it's also now offering $5,000 in incentives for owners that can open before December 31, 2018 to try and get more units occupied before the new year.

"Rome can't be built in a day, we are very positive, we know this mall will be successful and will be the premier shopping destination for the outer Calgary limits," Babiuk said.

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