RioCan is steering spare retail space toward health uses to keep rents coming and lights on. In February 2025, the Hospital for Sick Children and RioCan opened a staffed Virtual Urgent Care kiosk at RioCan’s Lawrence Allen Centre in Toronto. This tiny clinic footprint is meant to triage families and route them to care without a downtown ER visit. By June, RioCan’s portfolio sat 97.5 percent committed and 98.2 percent for retail, though newly vacant Hudson’s Bay boxes at three centres left visible holes to fill.
With cheap new retail construction off the table, swapping a fashion tenant for a clinic is a cost move. In October 2024, the REIT paused new builds and cut about 50 jobs, booking roughly C$9 million in one-time charges for about C$8 million in annual cash savings. Health tenants tend to sign longer deals to amortize specialized fit outs, and even general retail terms crept longer in 2024, with Canadian averages stretching to about 96 months. That is a steadier rent stream than pop-up apparel.
Cost Lives In The Contracts
The kiosk is small, but the indicators show this could be big. SickKids reports more than 14,000 completed virtual urgent care visits since launch of the program, and the mall kiosk adds greeters and translation in over 230 languages to widen access. That is traffic RioCan can plan around, and a hospital covenant that pays in cheques, and helps those who need it most.
Ontario has opened the door to more off hospital care with the Integrated Community Health Services Centres Act in 2023. The province licenses, inspects and can shut noncompliant centres, and says there are now over 900 licensees providing insured surgical and diagnostic services. That is a pipeline of permitted, funded uses that fit into suburban boxes and main street plazas.
A live case study sits east of Toronto. Newfoundland and Labrador Health Services signed a 20 year lease reported at about C$4.1 million a year to convert a former Costco into an ambulatory hub, which began opening to patients on October 21, 2025. Leases that long are rare in fashion, common in health, and they calm refinancing calls.
RioCan’s retail math is already working. New lease spreads hit 51.5 percent in Q2 2025, with blended spreads at 20.6 percent, giving it room to trade a little rent for a lot of terms if the tenant is a hospital or a licensed clinic. HBC’s exit created vacancy at three sites, but management said it is backfilling those holes.
Permits Decide Pace
Municipalities control whether clinics can open in malls. In Toronto’s main commercial zone, medical offices and clinics are permitted uses alongside retail, so the zoning door is open. The hard part is the building permit and change of use sign off, which brings fire, barrier free access, plumbing and occupancy into play before anyone hangs a stethoscope.
For procedures and diagnostics, the province controls the keys. In Ontario, community surgical and diagnostic centres need a provincial licence, ongoing quality checks and posted pricing for uninsured add-ons. If a centre misses the mark, the Ministry can suspend or revoke the licence. That oversight, and the public funding behind OHIP billed services, lowers default risk for the landlord, even if clinic build outs cost more upfront.
No one at RioCan is promising a hospital in every plaza. The posted deals are still small, like the SickKids kiosk. But with office vacancy hovering near the high teens nationally while RioCan’s retail stays near 98 percent, every clinical lease is one less soft goods gamble. Trade volatile categories for steady health uses, and let public health budgets do some of the anchoring.
