A retail expert says Canadian mall operators looking to fill spaces left behind after Nordstrom Inc. stores depart this year could cash in on the country’s strong demand for residential housing.

Nordstrom said last week it would shut down its 13 Canadian stores by the end of June as it winds down operations in Canada, nearly a decade after entering the market.

Jane Domenico, senior vice-president of retail at Colliers Real Estate Investment Services, told BNN Bloomberg  that retail landlords have options to fill the department-store sized gaps in their floorplans, given that Nordstrom had stores in “some of the best shopping centres in Canada,” including downtown Toronto’s sprawling Eaton Centre.

One of the options could be to break up the large vacant spaces into smaller shops – and potentially include some residential apartment units as the country struggles to keep up with a housing shortage.

“Across Canada, demand for residential has been extremely high, and so a lot of our retailers and our landlords working together have adopted a retail-and-residential friendly footprint to develop,” Domenico said in a Monday television interview.

The concept could fit with a central Toronto shopping centre like the Eaton Centre, she said, as retail landlords are “adaptable” and know how to pivot when the sector goes through changes.

“They’re looking for the long term,” she said. “What is best for today is not always going to be their direction. They're going to look to the future and see what other retail or other types of use make sense for those locations.”

Some Canadian mall owners have already begun thinking about adding apartments to their spaces.

In late 2021, Oxford Properties Group president Michael Turner told Bloomberg News about the company’s early-stage plans for residential buildings at Toronto’s Yorkdale Shopping Centre, and at the Scarborough Town Centre in the city’s east end.

Construction has also begun on condominiums around Oxford Properties’ Square One Shopping Centre in Mississauga.

With files from Bloomberg News.