30 May

Quartier DIX30 will be welcoming iA Financial Group offices

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Posted by: James Moysey

MONTREAL, May 23, 2017 /CNW Telbec/ – In July, iA Financial Group will open their new iA-VAG1 office in Quartier DIX30. Occupying two floors of the soon-to-be-completed 16-storey building in the dynamic Square, this new address will provide iA-VAG’s team of 200 professionals with a leading work environment in the sought-after and vibrant downtown that is Quartier DIX30 (+24M visits every year).

“We are delighted to welcome iA-VAG, the Dealer Services division of iA Financial Group, one of the country’s most prominent financial institution,” said Marilyn Cormier, Director and General Manager of Gestion Quartier DIX30 L.P., owned and managed in partnership by Oxford Properties Group and Carbonleo. “Like all of the businesses that have made Quartier DIX30 their home, iA-VAG professionals will enjoy an exceptional quality of life, in line with the Live, Work and Play concept echoed throughout the Quartier’s urban feel.”

LIVE, WORK AND PLAY
Day and night, throughout the seasons, the members of the iA-VAG office will join other tenants and customers of Quartier DIX30 in benefiting from unrivalled access to a unique mix of +300 destinations: restaurants and gourmet boutiques, entertainment, health and wellness venues, in-demand shopping including fashion and tech, convenient services and cultural events. What’s more, a well-travelled bicycle path runs through Quartier DIX30, and a bike-sharing service, pedestrian walkways and running tracks are also available on-site. Easily accessible by foot, the Du Quartier station of the future electric train network will also connect to downtown Montreal in minutes.

The building that will welcome iA-SAL teams will follow Quartier DIX30’s vision in terms of growth and sustainable development. This new construction will seek LEED Core and Shell certification upon completion. The clean, refined interior will maximize exposure to natural daylight, thanks to full-length windows and light-friendly (low-height) partitions. The human-scale building will add to the dynamic densification of the area and feature an adjacent urban park. The mixed-use layout will comprise a total of five floors of Class A office space, a trendy restaurant and shops, as well as the first Alt+ hotel from Groupe Germain, which will also include meeting rooms and a state-of-the-art conference centre.

ABOUT THE OXFORD PROPERTIES GROUP
Oxford Properties Group is one of the world’s premier real estate investment, development and management companies. Established in 1960, Oxford manages over $40 billion of real estate assets on behalf of its co-owners and investment partners, with a global portfolio spanning over 60 million square feet. We have offices across Canada and in London, Luxembourg, Boston, Washington DC and New York, with regional investment, development and management professionals who have deep real estate expertise and local market insight. Oxford is the global real estate arm of OMERS, the pension plan for Ontario’s municipal employees. For more information about our hands-on approach to real estate, visit www.oxfordproperties.com.

ABOUT CARBONLEO
Carbonleo is a private Quebec-based property development and management company. Its mission is to create vibrant environments that offer visitors an unparalleled lifestyle experience. Inspired by top creators and by world-class best practices, Carbonleo develops projects that fulfil the aspirations of present and future consumers. Founded in 2012, the company employs more than 40 people and provides its clients with the outstanding expertise of its local and international consultants. Its various projects include Quartier DIX30™, as well as Royalmount and Four Seasons Hotel and Private Residences Montreal. For more information, visit Carbonleo.com.

1known as iA-SAL outside of the province of Quebec

 

SOURCE Quartier DIX30

For further information: Geneviève Benoit, 514-843-2360, gbenoit@national.ca

18 May

CRE Panel: Colliers VP ‘bullish on Montreal’

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Posted by: James Moysey

Steve McLean | Commercial | Property Biz Canada | 2017-05-09

While it may not be garnering the headlines reserved for the Toronto and Vancouver real estate markets, Colliers International  senior vice-president Jean-Marc Dubé told attendees at the May 3 Land & Development Conference he’s “bullish on Montreal these days.”

Dubé, among five real estate executives participating in a panel session at the Metro Toronto Convention Centre, cited the quick sellouts of Canderel’s Tour des Canadiens 1 and 2 condominium towers at the Bell Centre downtown as well as the commercial activity in the Mile-Ex district a few kilometres north of the core. (Editor’s note: This is part two of our look at recent commercial real estate deals in major Canadian markets. You can read part one, which focuses on Vancouver, by clicking this link)

“Rents will be $35 gross versus $55 gross downtown,” said Dubé of Mile-Ex. “It really offers what has become exceptionally important in Montreal, which is that live, work and play area that millennials want.”

Loft offices are hot in Montreal, due in large part to the city’s booming technology sector, and Mondev’s 110,000-square-foot Soffitta development in Mile-Ex is expected to capitalize on that.

Dubé said its land was priced at $180 per square foot, and it will feature retail at ground level and five floors of office space.

Maison de Radio-Canada property

Dubé also discussed the Maison de Radio-Canada property on René-Lévesque Boulevard, a portion of which was purchased by Groupe Mach from the federal government.

The Groupe Mach portion of the land is just under a million square feet and will be turned into a development of just over three million square feet, according to Dubé, who added the existing 29-storey, 268,000-square-foot CBC/Radio-Canada tower will be retained.

“It needs to be gutted and redone on the inside. They’re planning on doing about 2,000 units of condos and townhouses on the site. There’s going to be some retail and office mixed-use development.ENT

“They want to get into the ground as soon as possible so, as soon as it’s ratified by the government, we’re going to see construction going on there.”

A consortium led by Broccolini will build a new tower on the site, with CBC/Radio-Canada signing a 30-year lease to occupy it.

Construction is expected to begin this summer, with completion anticipated by 2020.

Meanwhile, in Toronto . . .

“We’re seeing some foreign buyers and a substantial increase in institutional buyers looking for development sites,” CBRE Canada senior VP Casey Gallagher said at the conference. “There are also groups that are speculating on land and putting assemblies together and getting sites that are fully zoned and then selling them to an end developer.”

CBRE’s signature transaction in 2016 was the sale of an assembled property at 480-494 Yonge St. acquired by Cresford Developments and KingSett Capital for a 38-storey, 451-unit condominium development branded as Halo Residences on Yonge.

The deal had a long closing before it became final in November for a price Gallagher said worked out to $190 per square foot buildable.

“Cresford went to the market with it and managed to achieve sales that were at the time record-setting, though they may sound moderate now,” said Gallagher. “Sales were for close to $900 per square foot.”

Non-core Toronto properties

While robust pricing in the core is also pushing up prices in other parts of Toronto, Gallagher said it hasn’t dampened interest in such properties as:

• an historic 230,245-square-foot waterfront property on 5.3 acres of land at 351-369 Lake Shore Blvd. E., which was acquired in November by Dream Unlimited Corp. (DRM-T), Dream Hard Asset Alternatives Trust and Great Gulf;
• 1926 Lakeshore Blvd. W., a 1.1-acre site acquired in 2016 by Diamante Development Corporation for Mirabella Condos, a mixed-use development in pre-construction that will consist of two 35-storey towers with 760 residential units that will be built in two phases;
• and Bloorpointe, a 1.78-acre site at Bloor and Parliament streets that’s approved for a two-tower, 670,041-square-foot mixed-use development with a maximum height of 46 storeys, which was acquired by Tridel for $61 million.

Meanwhile, Cushman & Wakefield executive VP of capital markets Jeff Thomas said there’s been plenty of interest in a development opportunity at 25 Liberty St. in the Liberty Village neighbourhood that will feature 254,000 square feet of office space and 27,000 square feet of retail amenities when it’s available in the fourth quarter of 2019.

Toronto office condo development

Thomas also mentioned a 95,000-square-foot office development at 59 Hayden St. near Church and Bloor streets that’s a component of Cresford’s Casa II and Casa III residential condo developments.

The whole building will have a free strata title so it can be split up and sold as office condos. Even at $800 a square foot, Thomas said there’s interest from businesses and non-profit groups with strong balance sheets that want to own 12,000 to 24,000 square feet of space.

“There’s new knowledge and interest from users who are understanding what good office condo product is.”

13 May

How neighbourhood malls are struggling to survive

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Posted by: James Moysey

The ripple effects of the retail apocalypse that swept across the U.S. after the financial collapse of 2008 continue to emanate through Canada.

By
Sat., May 6, 2017

Mohammed Polani remembers the days when Whitby Mall Shopping Centre was packed with people who would line up outside his store at 7 a.m. to buy newspapers and magazines.

They were educated and literate, with a wide variety of hobbies and interests — diverse enough that he could sell magazines with titles like Vintage Fire Truck and Equipment and Wrist Watch Magazine and the Harvard Business Review.

“As long as there was a proper anchor, things were good,” says Polani. “The mall was like a can of sardines; it was very busy until about 2000.”

Then his clientele in the mall’s office space began to be relocated, as their companies were bought, sold and restructured.

The Woolco anchor store was replaced by a Walmart which was replaced partly by a Sobeys with no access through the mall. A second-hand store replaced a Staples.

The new generation of workers in the mall’s office spaces are more interested in Facebook and Instagram than they are in the magazines Polani sells, and they can access an infinite number of articles for free online.

At the end of his lease, Polani will hand in the keys to his store, joining a long list of retailers calling it quits in an unforgiving retail environment that is adding up to one long headache for mall owners.

Whitby Mall isn’t the only property struggling to attract and keep tenants. While top-tier malls, including Yorkdale and Toronto Eaton Centre are by all accounts flourishing, many neighbourhood malls appear to be an anchor away from a potentially fatal downward spiral. Others are clinging to their original retail purpose while waiting for redevelopment.

No one is predicting the kind of retail apocalypse in Canada that swept across the United States after the financial collapse of 2008, leaving even large malls across the country abandoned.

The single most important difference is that the U.S. had too much retail to begin with and still does. Industry estimates peg the amount of mall space in the U.S. at 25 square feet per person, whereas in Canada it’s closer to 15 square feet per person.

But the sector is in upheaval.

The retail industry is the single largest jobs category in the country, employing 1.96 million people in 2016, according to Statistics Canada. Most retail workers — 1.7 million — are employed in shopping centres, according to data from the International Council of Shopping Centres (ICSC.)

There are 3,742 shopping centres in Canada measuring more than 40,000 square feet, including strip malls, according to the ICSC — up from 3,496 in 2012.

Mohammed Polani, in his magazine store Daily Planet, at Whitby Mall Shopping Centre. He has owned the business for 23 years in two different locations in the mall. He has decided to close up shop at the end of his lease.
Mohammed Polani, in his magazine store Daily Planet, at Whitby Mall Shopping Centre. He has owned the business for 23 years in two different locations in the mall. He has decided to close up shop at the end of his lease.  (Nick Kozak)  

Anchors away

Historically, malls were anchored by department stores at either end, but the department store sector is in decline in the U.S. and Canada.

“Over the five years to 2021, the industry is forecast to continue contracting,” according to an industry report, “Department Stores in Canada,” from market research firm IBISWorld.

“Profit has also suffered over the five years to 2016, as many industry operators have slashed their selling prices in order to remain attractive to customers,” according to the report.

“Malls used to rely on their anchors and the anchors are changing faster than anyone imagined they would,” said Mary Mowbray, senior vice-president, group sales for Colliers International, pointing to Target, which cycled in and out of shopping malls in two years.

Some malls have already backfilled — or failed to backfill — the 133 large spaces left by Target when it abruptly pulled up stakes in 2015.

The failure of a retailer like Sears Canada — working on another turnaround strategy after years of diminishing returns and selling off stores — would send shock waves across the already fragile retail ecosystem.

Sears has closed 11 department store anchor locations across Canada since 2012. It still anchors 93.

RioCan Real Estate Investment Trust had 26 Target stores, and while CEO Edward Sonshine managed to extract a $132-million payment from Target in bankruptcy and many of the locations were leased to new tenants, others remain empty two years later, like the one at Five Points Mall in Oshawa.

Now the enclosed part of Five Points Mall will be demolished. The area where the empty Target store is located has been sold to a self-storage company. It will remain a shopping centre, but not enclosed.

Enclosed malls are too expensive to operate — the taxes are high, they’re expensive to heat in winter and cool in summer, said Sonshine.

“That type of space, unless you’re part of a very large centre, it’s obsolete,” he added.

“The big malls are all fine, but the smaller malls, like this one, they really have no reason to be a mall, it’s much cheaper for the tenants and for the customers, quite frankly, to not have it be enclosed.”

Interior pictures of the Five Points Mall in Oshawa.
Interior pictures of the Five Points Mall in Oshawa.  (Vince Talotta)  

The same approach is being taken with RioCan’s Niagara Square property. Riocan’s County Fair Mall in Smiths Falls was sold late last year.

In the west end of the city, Kipling-Queensway mall has the same hushed feel of Five Corners. It is anchored by one of Canada’s two remaining Zellers stores (the other is in Ottawa.) A Sobeys moors the opposite end, but there are several vacant stores in the space between them, including a vacant kiosk space.

Honeydale mall in Etobicoke is widely believed to be Canada’s only ghost mall, boarded up and fenced off.

Malvern Town Centre, which cycled through a Zeller’s closure followed by a Target closure, lost its No Frills anchor on April 27, leaving a 70,000-square-foot space to fill.

“We are definitely going through a transition now,” said Jennifer Huntley, director of leasing at Davpart Inc., the company that owns and operates Malvern Town Centre.

She feels confident the mall will pull through — it brought in a 20,000-square-foot Planet Fitness last year and has plans for the No Frills space, but it’s too early to announce what those plans are.

“I think it’s going to get stronger, absolutely.”

Huntley said the company is working with city council to improve public transportation to the mall, and planned new housing developments will soon increase population density, creating a larger market.

Retail retreats

But the closure of big box stores like Staples, which has been downsizing its bricks-and-mortar presence across North America, has given prospective tenants more options to choose from, making it more difficult for malls to compete.

“It is hard to survive,” said Ilyas Qureshi, owner of E Games Plus at Malvern Town Centre, which sells video games and toys. “Day-by-day, business is going down.”

His lease is up in September and he doesn’t know if he will renew.

Pickering Town Centre, anchored by a Sears and a Hudson’s Bay, has several large empty storefronts, because smaller-store brands are also scaling back their physical presence.

“Retailers don’t want to have 600 stores anymore in a country. They are aiming for something closer to 300,” said Spenser Allaway, senior associate, Green Street Advisors, a commercial real estate consultancy.

“I think we may see a lot more rationalize their store counts in the coming years.”

The softness in the sector is being driven by a large number of retail failures, including once-dominant brands like American Apparel, Mexx, Jones New York and Tip Top Tailors, and Canadian mainstays like Danier Leather and Jacob. A few brands and retailers are in expansion mode, but they aren’t expanding as fast as other retailers are falling, and the result is a large number of vacant storefronts in malls.

Interior pictures of Pickering Town Centre.
Interior pictures of Pickering Town Centre.  (Vince Talotta)  

The growth of online

The growth of online sales is another contributing factor. According to an estimate by Colliers International, online sales of $23 billion in 2014 replaced 76.7 million square feet of bricks and mortar stores.

That’s roughly equivalent to the shopping centre inventories of Vancouver, Halifax, Ottawa and Victoria combined, according to the report.

“My caution to anyone in the shopping centre industry is that this is a very fragile situation in my view,” said retail consultant Doug Stephens, author of the newly published book Re-Engineering Retail, The Future of Selling in a Post-Digital World.

Online sales are not just cutting into sales at bricks-and-mortar stores, online shopping is recalibrating what people think shopping should be, Stephens said.

Shopping online is frictionless, and shoppers can get almost unlimited information about the products they’re buying.

“All that is changing our consumer brains to expect more when we actually make the effort to go to a shopping centre,” Stephens said.

“Thirty years ago the shopping centre was really the apex of convenience. Pre-Internet, where else could you go for shopping? That has been usurped by the Internet. The biggest big box of them all is the Internet, specifically Amazon.”

The market is being bifurcated, said Mowbray, of Colliers. Higher end malls with better, newer tenants are doing better than secondary market malls.

Maheswaran Arumujam, who operates Mr. Pro Prints, says the location at Whitby Mall works for his retail business.
Maheswaran Arumujam, who operates Mr. Pro Prints, says the location at Whitby Mall works for his retail business.  (Vince Talotta)  

Chain stores like to be in mall properties where there is a stronger customer base, and top-tier malls aren’t in competition with the strip malls and power centres that are draining business from neighbourhood malls.

For a long time, fast fashion, which relied on low prices and rapid turnover of goods, drove shoppers into malls, creating the mentality that there should always be something new in retail.

“The consumer starts to get a bit jaded,” said Mowbray.

Paring the portfolio

Even mall owners are getting out of the mall business. Canada’s top commercial real estate development and investment firms have pared down their mall portfolios by half in recent years.

Cadillac Fairview Corp. Ltd. began shrinking the number of its retail assets 10 years ago, from about 40 to the current 20 retail assets across the country, according to Salvatore (Sal) Iacono, executive vice-president, operations, Cadillac Fairview.

In the past five years, Cadillac Fairview has invested $2 billion in developing and redeveloping the mall assets it kept, including Sherway Gardens and Toronto Eaton Centre.

“We’ve made a huge commitment financially to retail’s future in these select locations,” said Iacono.

Oxford Properties Group has pared down to fewer than a dozen malls, and also invested $2 billion in redeveloping its remaining mall assets, including expansions at Yorkdale and Square One, which it co-owns with the Alberta Investment Management Corporation.

Ivanhoé Cambridge, which owns Vaughan Mills, Fairview Mall and Oshawa Centre, has 28 mall properties in Canada, including five owned with Cadillac Fairview, down from 48, according to Claude Sirois, president, retail, Ivanhoé Cambridge.

Legions of pensioners are connected to those decisions: Cadillac Fairview is a wholly owned real estate subsidiary of the Ontario Teachers’ Pension Plan (OTPP), with 318,000 active and retired members. Oxford Properties owns and manages its portfolio on behalf of the Ontario Municipal Employees Retirement System, (OMERS), with 365,000 members and 900 participating employers.

A common area inside of Whitby Mall Shopping Centre.
A common area inside of Whitby Mall Shopping Centre.  (Nick Kozak)  

Ivanhoé Cambridge is a real estate subsidiary of the Caisse de dépôt et placement du Québec, a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans.

Part of it is cyclical: some malls go through periods of decline. Erin Mills Town Centre looked rough for a while after it lost Target and before Walmart moved in. The Oshawa Centre was recently substantially expanded and improved by a $230-million investment by owner Ivanhoé Cambridge. Mall traffic is up 55 per cent as a result.

Pickering Town Centre general manager Diane Camelford said while there are blank storefronts in the mall, it’s also being redeveloped, having recently added a Farm Boy grocery store and a Saks OFF 5th. A Cineplex and a Pickle Barrel restaurant are also planned.

She believes better times are ahead, along with construction of a new residential development called New Seaton, which is expected to add 70,000 new residents to the area.

Two rows of storefronts on the upper level of the mall, in the east wing, remain unoccupied.

“It’s challenging for everybody. There have been a lot of companies, sadly, that have left the landscape,” said Camelford.

Destined for development

Other malls, including Honeydale, have development potential, although that can take years — even decades. The Honeydale project, which would include a mix of residential and retail components, has been stuck in development limbo for years.

RioCan’s Sonshine has described his retail empire, with more than 300 locations across Canada, as a land bank with some of the best future redevelopment sites in the country.

“Every shopping centre ever built is at a major intersection and a good location. As the country fills in transit and infrastructure over the next 10 years — and it’s not just a Toronto phenomenon, it’s happening in Calgary, Edmonton, Montreal, Vancouver and Ottawa — it unlocks opportunities,” he told analysts on the company’s most recent earnings call.

The new owners of the Whitby Mall Shopping Centre purchased it last year, with an eye to its long-term potential as a mixed-used development, including homes.

Interior pictures of Kipling Queensway Mall.
Interior pictures of Kipling Queensway Mall.  (Vince Talotta)  

“In our mind, we were buying land with income,” said Adam Paul, president and chief executive officer of First Capital Realty, the same firm that redeveloped Hazelton Lanes into Yorkville Village.

“Our immediate plans are to continue to run it because we are receiving an acceptable return on it. We will work with the city and the community and existing retailers to determine what the appropriate redevelopment will look like and the timing. But I know it’s not short term.”

Most retailers aren’t interested in investing in a location unless they have a minimum five-to-10 year horizon, says Nick Endrizzi, director of leasing for The Conservatory Group, which owns Kipling Queensway and describes itself as the largest builder of luxury condominium communities in the GTA.

Eventually, Kipling-Queensway will be redeveloped. In the meantime, new tenants, including a shoe store and a dollar store are expected to open up in the next few months.

Endrizzi blames the decline of the neighbourhood mall in part on a huge growth in the number of retail plazas and centres.

“Thirty years ago you didn’t have a power centre, you didn’t have a big-box type centre, you didn’t have outlets — you didn’t have that kind of choice.”

10 May

Aéroports de Montréal to invest $14.2M to improve customs at Trudeau airport

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Posted by: James Moysey

1 May

Lufa Farms rooftop greenhouses trending in Montreal

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Posted by: James Moysey

When the founders of Montreal urban agricultural pioneer Lufa Farms first approached building owners about renting their roofs to help the company establish a rooftop farm, “everybody thought they were crazy,” recalls public relations and communications manager Simon Garneau.

Fortunately, one building owner said yes. So, in 2011 Lufa Farms opened in Montreal what the company says was the world’s first commercial rooftop greenhouse.

Lufa, which operates under the slogan “Our vision is a city of rooftop farms,” recently opened its third and largest hydroponic rooftop greenhouse in the city. The 63,000-square-foot facility on top of an empty warehouse in the borough of Anjou produces more than 40 varieties of vegetables.

“The business model is that we rent the roofs,” says Garneau.

The model benefits everyone because even though the roof is rented for less than interior space, building owners get money from a place they would normally not be able to generate revenue.

In addition, the rooftop greenhouse reduces owners’ heating and cooling costs because it acts as a pad between the heat and cold outside, he says.

Combined, the Lufa Farms facilities have 137,000 square feet of growing space and grow about 75 varieties of fresh vegetables.

10,000 produce baskets per week

Lufa delivers more than 10,000 baskets a week of produce to Montreal-area residents. The greenhouses give residents access to local produce that would otherwise need to be imported from thousands of miles, particularly outside the summer months.

The newest facility – the most automated yet – specializes in leafy greens and produces more than 40 varieties of lettuce, collard greens, kale, radish, broccoli, cauliflower and celery. Prime Minister Justin Trudeau toured the facility in late March.

It was developed with $3 million in debt financing from the union capital development fund Fonds de solidarité FTQ and $500,000 in support from La Financière agricole du Québec. The Quebec government fund supports sustainability in agriculture.

It was designed by Dutch greenhouse innovators Kubo and outfitted by Belgian greenhouse automation experts Hortiplan.

The Anjou “farm” is joined by the original 32,000-square-foot facility, in Montreal’s Ahuntsic neighbourhood, which specializes in cucumbers, bell peppers, hot peppers, herbs and micro-greens. A second 42,000-square-foot facility that opened in Laval in 2013 specializes in tomatoes and eggplants.

Searched via Google Maps

When founders Mohamed Hage and Lauren Rathmell first set out to find space for a greenhouse, they used Google Maps to search for suitable Montreal buildings with flat surfaces and very little rooftop equipment, Garneau says.

At the time, Montreal had no rules for rooftop greenhouses. But after negotiations, the city decided to consider rooftop greenhouses as an extra floor on the building. Lufa now has to meet bylaws for everything from emergency escapes to fireproofing.

“The success of the first greenhouse made things simpler, because the city has now adjusted to the model. There are less hurdles when we want to build on the roof,” Garneau says.

Garneau says now that Lufa Farms is a proven and growing concern, it’s been easier to find space for rooftop rentals.

“It doesn’t sound as crazy to people; it actually makes sense to them now. Why go out of town to grow vegetables when you can use a wasted space that just creates extra heart islands in the city and why make your vegetables travel when they can be near you?”

Partnership with farmers, producers

Subscribers to Lufa pay a minimum weekly price of $15 for produce baskets, which can be customized to include products from more than 200 partner farmers, food artisans and local producers.

“Because we’re hydroponic, we can’t grow root vegetables like potatoes, beets and carrots, so we deal with local organic producers who are in most cases too small to sell to large-scale grocery stores,” he says.

The baskets are delivered to more than 350 pick-up points in the Montreal area, from yoga studios to libraries and daycare centres. For an extra $5 weekly, subscribers can have their baskets delivered to their homes by Lufa’s fleet of electric cars.

Lufa Farms plans to continue the expansion of its urban farm projects in Quebec and in New England.

The vision is “to see cities filled with rooftop farms,” Garneau says. “That’s the future of feeding cities sustainably and more intelligently.”