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TransLink expands retail operations at transit hubs

Transit operator aims to help subsidize costs with retail lease revenue
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TransLink's director of asset management, Jennifer Randall, oversees leasing activity at rapid-transit stations

TransLink has increased the amount of revenue it gets from leasing retail space at SkyTrain stations, and it aims to accelerate the pace of that revenue growth in the years ahead.

So far, the transit operator oversees 21 retail spaces that cover 10,500 square feet, with 11 in fare-paid zones and 10 outside those gates, the agency's director of asset management, Jennifer Randall, told BIV.

The Broadway Line's planned opening in 2026 is likely to be a big driver in TransLink retail-leasing revenue growth, as will be Richmond's new Capstan Station on the Canada Line, which is set to open next year.

At least five of the six future Broadway Line stations are expected to have retail spaces owned and operated by TransLink, Randall said.

She added that it may turn out that all Broadway Line stations include retail space.

Upgrades and expansions to existing stations could also yield more leasable retail space inside TransLink-run transit stations.

"We're actively looking at expanding [retail space] at other stations where it's feasible," she said.

Retail leasing revenue is negligible part of TransLink operations

Retail lease revenue remains a tiny part of TransLink's budget, as it comprises less than one tenth of one percent of the company's overall revenue, which was about $2.135 billion in 2022.

The biggest slices of TransLink's 2022 revenue included:
• 45.8 per cent from taxation;
• 25.9 per cent from transit fares; and
• 20 per cent from government transfers.

Other revenue came from investment income, development cost charges and miscellaneous sources.

While the agency raked in only $1.485 million from retail leasing in 2022, that was up about 18.5 per cent from the roughly $1.3 million it generated in 2021, Randall said.

Some of TransLink's biggest tenants include Tim Hortons, Donair Dude and INS Market.

Randall said her agency has been increasing retail leasing revenue at about 15 per cent per year for many years.

TransLink told BIV in 2017, that its 2016 retail-leasing revenue was about $500,000, so the proceeds from that income stream have almost tripled in six years.

The corporate structure for overseeing retail space at Metro Vancouver transit stations is complicated, given that not all retail outlets at transit stations contract with TransLink.

InTransit BC, for example, was a partner in building the Canada Line, and that separate company oversees Canada Line real estate.

InTransit BC generated "less than $500,000" from retail leasing in 2022, TransLink told BIV in an email. InTransit BC uses the money it generates to offset costs running the Canada Line.

TransLink is set to oversee real estate at the future Capstan Station, which it is building, because that station was not part of the original Canada Line development.

Retailers see future success at transit station locations

Retailers have had mixed success operating stores at transit stations but some are optimistic enough about the future to sign new leases.

Vancouver-based pizza franchisor Freshslice Pizza recently had a franchisee open a store in the fare-paid zone at the Broadway–City Hall Station.

Freshslice's leasing manager Franky Schubert said the store's sales have "exceeded expectations." He said TransLink provides employees with free passes to enter the fare-paid zones so there has not been any pushback with them for needing to pay to enter the paid-fare zones.

Freshslice is set to open a location outside a fare-paid zone at Yaletown Station this week. Different franchisees are also poised to open locations at the Oakridge–41st Avenue Station, Holdom Station and King George Station. Signage outside King Edward Station indicates that a Freshslice location will open there soon as well. 

"We always look for high traffic and dense areas because we know that people who are looking for pieces of pizza by the slice, and the convenience and quality that we offer, are typically going to be in around these areas."

Other tenants on the Canada Line include the MTY Group's Jugo Juice banner, which has had a franchised store at City Centre Station for about 13 years.

Franchise owner Imran Hirani previously operated a Jugo Juice at the Broadway City Hall Station, where Freshslice now operates.

"Since I bought the [City Centre Station] store, it did amazing in 2011 and until COVID hit, and then it was bad, or whatever you want to say – sales were really down," he said. "This year sales have picked up quite a bit."

Hirani is confident enough in the business that he renewed his lease last year, he said.

His business depends on foot traffic from the station and with office workers downtown continuing to work some days at home, that cuts into his business, he said.

Hirani could also feel the effect of Nordstrom's closure at the adjoining CF Pacific Centre mall, as that store generated some destination traffic.

Past Jugo Juice franchisees on the Canada Line did not have good experiences locating at stations.

Franchisees who owned Jugo Juice outlets in fare-paid zones at the King Edward and Oakridge stations on the Canada Line sued the Ontario-based smoothie vendor in 2013. Hirani was not part of that lawsuit.

The disgruntled Jugo Juice franchisees alleged in court filings that Jugo Juice misled them on the cost of operating the outlets and other aspects of how the stores could run.

Jugo Juice allegedly told the franchisees incorrect information such as that:
• transit riders could consume beverages while on trains;
• the franchises would be located outside of the fare-paid zone; and
• their employees would be able to travel between the two franchises on the Canada Line for free, according to a lawsuit filed in B.C. Supreme Court.

It is unclear how that dispute was resolved.

Randall said TransLink has a "policy" against eating and drinking on trains and buses but fines are not issued.

"The retail offering is intended to be something for when passengers depart the system," she said.

TransLink has yet to consider licensing private retail kiosks that entrepreneurs could bring and then remove at the end of the day. Some such kiosks operate outside TransLink stations but Randall said TransLink does not get licensing revenue.

In many cases, retail space at transit stations adds needed and appreciated amenities for shoppers, and the tenants do not compete with other area retailers, she said.

"I've never heard of any push-back [from nearby retailers,]" she said.

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