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Landlords Eye New Leasing Options After Empire Deal
Landlords in 19 Canadian markets could have more freedom to bring competing grocery stores into shopping centres anchored by Empire banners.
A Sept. 22 agreement with the Competition Bureau requires Empire to stop enforcing certain lease restrictions that have limited where rival grocers can open near stores such as Sobeys, Safeway, FreshCo, Farm Boy, Foodland and IGA.
Ten days later, attention is shifting from the agreement itself to whether it produces actual leasing activity.
A landlord, developer or prospective tenant can ask Empire to remove a restriction covered by the agreement. Once that request is made, Empire generally has 20 business days to remove it or explain in writing why it will not.
The agreement applies to full-line grocery competition in 19 markets, including Bonnyville, Alta.; Paris and Thornbury, Ont.; Truro and New Glasgow, N.S.; Grand Bay-Westfield, N.B.; Bishop’s Falls, N.L.; and nine Quebec communities.
Empire is also giving up some restrictions more broadly across the country. Those include property covenants that can restrict grocery competition even after Empire leaves a site, along with some lease clauses affecting specialty food retailers, pharmacies, dollar stores and convenience stores.
For landlords, the practical question is whether space that was previously off-limits to certain tenants can now reach a wider leasing market.
That matters as new retail supply becomes increasingly scarce. Connect reported Friday that Canada’s retail construction pipeline has fallen to 4.9M SF, while JLL found grocery stores have anchored 96% of daily-needs centres completed since 2022.
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