/Retail%20(Year%20End%202006) by DTZ Barnicke Vancouver Limited

GVRD RETAIL REPORT YEAR END HIGHLIGHTS

2006

MARKET OUTLOOK British Columbia’s economy continues to thrive. Population growth and rising income has sparked a record year for retail sales, which is expected to climb to $53.4 billion in 2007, an increase of $3.5 billion from the previous year. A Conference Board of Canada report predicts that Canadian consumers’ spending habits will be on the rise for the next four years leading up to the Olympics, with retail industry profits reaching record levels by 2010. Increasing labour and material costs are projected to cut into profits in 2007, but will rebound between 2008 and 2010 as developers become more able to accurately plan for rising construction costs. INVESTMENT SALES In the second half of 2006 there were over 160 transactions of retail properties, totaling over $282 million. The largest retail transaction was the London Plaza Shopping Centre in Richmond for $37 million dollars, a 6.5% capitalization rate. The Impact Plaza at the corner of 152nd Street and 100th Avenue in Surrey was the second largest transaction and sold for $30.4 million dollars. The plaza contains 134,250 sq.ft. of commercial space that includes 22,327 sq.ft. of office on the second and third floor.

London Plaza - 5951 No. 3 Road, Richmond

A mixed-use development is planned at 1685 Ontario Street. The application is for the construction of three mixed-use buildings which will include 215 residential units, retail and a grocery store, for a total of 25,970 sq.ft. of commercial space. At 108 Athletes Way, there are plans to construct three residential buildings of nine VANCOUVER to five storeys that will have 14,661 sq.ft. of commercial space on the ground floor, including a liquor store. Another three residenSOUTHEAST FALSE CREEK OLYMPIC VILLAGE UPDATE tial buildings of nine to five storeys is planned at 1631 Ontario The City has received development applications for numerous resi- Street which will include 19,223 sq.ft. of commercial space, indential and mixed-use developments in the Olympic Village area. cluding a pharmacy. MAJOR RETAIL CONSTRUCTION PROJECTS Project Location Description Progress The Rise 8th and Cambie Mixed-use development with Home Depot, Under construction, expected completion Save-On-Foods and Winners Q4 2007 Crossroads

Broadway and Cambie

Mixed-use development with 140,000 sq.ft. Under construction, expected completion of retail, anchored by Lululemon office space, end of 2008 Whole Foods, Royal Bank, and London Drugs

RETAIL TREND: More and more Canadians are shopping online, 23% of Canadians planned to shop at e-retailers during the 2006 holiday season, the biggest percentage jump in 6 years. Canadians spent $39.2 billion in 2005 on online purchases. Almost 6 million shoppers in BC spent about $1.9 billion on Boxing Day 2006. 800 - 475 WEST GEORGIA STREET, VANCOUVER, B.C. V6B 4M9 PHONE: (604) 684-7117 • FAX: (604) 684-1017 VISIT OUR WEBSITE: WWW.JJB.COM/VANCOUVER

GVRD RETAIL REPORT

YEAR END HIGHLIGHTS

DOWNTOWN VANCOUVER Many of the Downtown parkades have undergone or are expected to undergo redevelopment in the future, an example of which is the parkade at Smithe and Seymour, that has recently been demolished. Other parkades that are going to be redeveloped are The Bay parkade, located on Richards north of Georgia, and the parkade at Smithe and Richards. With the decline of available public parking Downtown, rates of other existing parkades are starting to rise. If this trend continues, many customers will be deterred from shopping Downtown and will choose to do their shopping at big box stores in the suburbs where there is ample free parking. However, with the construction of the RAV line, Downtown will be even more accessible to pedestrians.

RW & CO. (image 3)

In November, Costco opened their first big-box store embedded in a downtown residential tower complex. At 127,000 sq.ft., the complex will have four residential towers sitting on top of it. ROBSON STREET Retail Area Robson Street

Net Lease Rates / sq.ft. $145-$210

Vacancy Rates Stable

Leasing activity was high on Robson Street in the second half of 2006 with retailers opening, vacating, relocating or expanding. On the corner of Robson and Richards, Starbucks (image 1) opened in Tiffany & Co. (image 4) the new building at 498 Robson Street. Across the street, construction is under way at L’Hermitage, a residential tower, which will have an IGA Marketplace on the ground floor and HomeSense on the second floor. On the 500 block of Robson, the following new tenants moved into the new L’Aria mixed-use development: Next Noodle Bar, Zeal Hair Salon and PrimaTasteTrue Singapore Cuisine, joined H-Mart which opened earlier in 2006. On the 600 block of Robson, B-Mobile, Griffin Jewelry, Geological Survey Canada and McGreens have opened, and across the street Jaywalk Clothing will be moving into 606 Robson. At 820 Burrard, a few stores south of Starbucks (image 1) Robson, Joey’s restaurant is currently undergoing renovation and will be opening soon. The restaurant will encompass about 5,700 sq.ft. and the current patio area will be completely redone. On the 1000 block of Robson, Seventy Two Sports Bar has moved into the old Mahoney’s Sports Grill location. Joneve relocated one block west to 1075 Robson, and on the same block Calforex Currency Exchange, Time Out 24 hr Gift & Convenience and Rogers Wireless have moved in. Icing by Claire’s (image 2) moved into the old Satchel Shop location at 1024 Robson. Many new stores opened up on the 1100 block of Robson, including: Bizou, Gia Shoes, Robson Optical and RW & CO. (image 3) On the 1200 block, Ebisu on Robson moved into the old Hooters location, and on the same block Sakura, Money Mart, Original Flavours of India Restaurant, Fusion and Liberty Wine have all moved in. Icing by Claire’s (image 2) VANCOUVER • Toronto • Calgary • Edmonton • Winnipeg • Montreal • Mississauga • Nanaimo • Burlington • Halifax • Kingston • London • Markham • Niagara • Ottawa • Regina • Waterloo • Victoria

GVRD RETAIL REPORT

YEAR END HIGHLIGHTS

change. There are some restaurant changes occurring in Yaletown, with a trend towards established restaurant chains moving in as they can afford the high rent. Earls will be opening its fifth Vancouver restaurant in Yaletown on the northwest corner of Mainland and Helmcken. At 1116 Mainland Street, Circolo restaurant has been sold to the operators of Joe Fortes and will shut down for renovations.

Holt Renfrew (image 5) ALBERNI STREET The 1000 block of Alberni Street area is continuing its trend towards a high-end shopping location. Tiffany & Co. (image 4) opened a 4,700 sq.ft. store this past December, at 723 Burrard. Their previous location, the boutique in Pacific Centre’s Holt Renfrew, will remain open. Cartier has moved from Howe and Hastings a halfblock to 456 Howe and has tripled in size to 2,500 sq.ft. Suki’s has moved their Robson location to Georgia and Burrard. At 1066 West Hastings, renovations are currently underway for a built-tosuit restaurant for the operators of Carderos. As part of the renovations they are taking out the pedestrian bridge over Hastings Street. The restaurant will be approximately 10,000 sq.ft. and two stories high. The relocation and expansion of Holt Renfrew (image 5) in Pacific Centre will encompass the entire third floor of the mall’s north atrium and portions of the first and second floor. It will include a high-end rooftop restaurant, a new storefront for curb appeal, and it is expected to open in April 2007. The old Holt Renfrew location will be divided into nine units. The mall’s food court was moved due to the relocation and the new food court opened in November 2006.

Retail Area Granville Street Denman Street

Net Lease Rates / sq.ft. $35 - $100 $35 - $55

Vacancy Rates Stable Stable

DOWNTOWN GRANVILLE STREET LikeYaletown, Downtown Granville Street is also seeing a trend towards higher rental rates, which are creeping as far south as Drake Street. The Hudson, at Granville and Dunsmuir, just completed, providing 50,000 sq.ft. of retail space. Shoppers Drug Mart has leased the northeast corner location of Granville and Dunsmuir, formerly a CIBC branch, and Urban Sushi has moved into 562 Granville. Buffalo Clothing has relocated from Robson to 670 Granville and Puma (image 6) opened in December at 834 Granville. At 1020 Granville, Numero Uno Pizza opened and two stores south Dare to Wear opened. At 1208 Granville, G Sports Bar Puma (image 6) and Grill opened and Enterprise Rent-A-Car moved to 1250 Granville from its demolished location at Seymour and Smithe.

YALETOWN Yaletown is an area that has seen a surge in rental rates, now ranging from $40-$60 per sq.ft. This is a change from the beginning GASTOWN of the year where rates ranged from $30-$40 per sq.ft., and there No longer just for tourists, Gastown is seeing a resurgence, and is has been a high turnover rate as a result of the sharp rental rate attracting designer-savvy customers looking for high-end furniture and fashion. Inform recently opened a new 30,000 sq.ft. store at 50 Water Street. They will also remain in their original location, at 97 Water Street, which they have been in for the past 35 years, and are about to undergo renovations. 21 Water Street (image 7), formerly occupied by Brothers Restaurant, is currently undergoing a heritage upgrade. Another designer store, Richard Kidd, at 65 Water Street is located in an architecturally striking building, consisting of a 42 foot atrium between two old brick buildings, this store carries exclusive designer clothing, fragrance and jewelry. Salt Tasting Room, a wine bar featuring different meats and cheeses, has moved into 45 Blood Alley. Aside from new retailers opening, Gastown is also seeing a number of upscale condominiums being built. 21Water Street (image 7)

GVRD RETAIL REPORT SOUTH GRANVILLE STREET Retail Area South Granville

Net Lease Rates / sq.ft. $40-$85

Vacancy Rates Stable

South Granville Street continues to experience an influx of home furnishing operators. To add to the growing number of established furniture stores in the area, EQ3 moved into the old Long & McQuade location at 7th and Granville, and across the street at 2354 Granville, Urban Barn has moved into their new location. Chachkas Jewelry relocated its store from Robson Street to 2423 Granville, and on the same block Lamberts Gallery opened. At 2675 Granville, Ecco Shoes opened their new location and Bellisimma moved in across the street. On the corner of 11th and Granville, Shoe Outlet has opened in Seattle’s Best Coffee’s old location, and Chic opened one block south. Caban moved out of their space at 2912 Granville and Urban Planet has moved in. Pure Nail Bar opened its fourth Vancouver location at 3061 Granville, and Turnabout moved one store over to 3109 Granville. Turnabout’s old location, at 3121 Granville Street, is currently undergoing renovations and a new restaurant, Chow, will be opening soon. WEST BROADWAY AND WEST 4TH AVENUE Retail Area West Broadway West 4th Ave

Net Lease Rates / sq.ft. $20-$40 $30-$60

Vacancy Rates Stable Stable

West Broadway has been fairly consistent in the second half of 2006 with just a few store changes. A new Tim Hortons opened on the corner of Broadway and Balaclava and right beside it a new Turnabout store opened as well. A few blocks east, at Broadway and McDonald, Royce Shoes has moved in. West 4th Avenue has seen a rise in rental rates. At the beginning of 2006 they ranged from $30-$50 per sq.ft., and by the end of SIGNIFICANT SALE TRANSACTIONS JULY – NOV 2006 Street Name London Plaza - 5951 No. 3 Rd Impact Plaza - 10060-10090 152nd St Meadowvale Shopping Centre - Harris Rd & Lougheed Hwy 4265 Lougheed Hwy Olive - 3277 & 3297 Cambie St Ocean Walk - 1868 Marine Dr 19990 Langley By-Pass FOR MORE INFORMATION, PLEASE CONTACT: JACKIE SMILEY KASIA HAJDUK DIRECTOR OF RESEARCH RESEARCH ANALYST OR (604) 630-3405 (604) 630-3386 KASIA.HAJDUK@JJB.COM JACKIE.SMILEY@JJB.COM

YEAR END HIGHLIGHTS

the year they were reaching highs of $60 per sq.ft. There has been some shuffling amongst the cluster of ski and snowboard stores on West 4th. Comor has moved its location but remains on the same block, and is now on the northeast corner of Burrard and West 4th. Boardroom has expanded and taken over the old Carnarvon Motors location. Two new restaurants have opened on the 1900 block of West 4th, Gastropod and Fuel Restaurant. On the corner of West 4th and Maple, Spank is relocating across the street to 2076 West 4th and they will be opening a dress store in their old location. North Face has opened their largest Canadian retail outlet, at 3,500 sq.ft., and is located at 2140 West 4th. SUBURBAN For a detailed description of major retail construction projects in the suburbs, please see our report insert GUILDFORD TOWN CENTRE Guildford Town Centre is proposing to add 40 more stores and update the shopping centre. According to the plans, they will demolish about a fifth of the mall’s existing structure and add 505,000 sq.ft. of new space, increasing the shopping centre’s total space from 982,000 sq.ft. to 1.27 million sq.ft. The value of this expansion project is over $250 million. LOOKING AHEAD BC is expected to continue to outperform the healthy national economy in 2007, and should continue to experience a thriving economy well into 2010. In 2007, we expect to see home centres, hardware stores, pharmacies and personal care stores to flourish. Home centres and hardware stores saw a 24% increase in retail sales in October 2006 over 2005. Pharmacies and personal care stores experienced an 11% gain during the same period. Also in 2007, we expect to continue to see the trend of box retailers seeking out urban locations, such as the first multi-level Canadian Tire store and Best Buy on Cambie and the downtown Costco in Vancouver. Municipality Richmond Surrey Pitt Meadows Burnaby Vancouver West Vancouver Langley

Building Size (sq.ft.) 106,191 134,250 105,000 31,733 21,367 14,501 34,000

Total Price $37,000,000 $30,400,000 $17,600,000 $11,650,000 $9,350,000 $8,800,000 $8,000,000

800 - 475 WEST GEORGIA STREET, VANCOUVER, B.C. V6B 4M9 PHONE: (604) 684-7117 • FAX: (604) 684-1017 VISIT OUR WEBSITE: WWW.JJB.COM/VANCOUVER

VANCOUVER • Toronto • Calgary • Edmonton • Winnipeg • Montreal • Mississauga • Nanaimo • Burlington • Halifax • Kingston • London • Markham • Niagara • Ottawa • Regina • Waterloo • Victoria All information has been obtained from sources considered to be accurate but is not guaranteed and is subject to conditions at the time of any transaction taking place. Properties are submitted subject to prior sale or lease, withdrawal or changes without notice.

MAJOR RETAIL CONSTRUCTION SUBURBS YEAR END 2006

Map # Project 1 Cloverdale Crossing

Location Description Surrey, 64th Ave 104,300 sq.ft. shopping centre with & 176th St tenants including: PriceSmart Foods, Tim Hortons, Coast Capital, Boston Pizza, Starbucks, Blockbuster & Toronto Dominion Bank Scott Road Surrey, Scott Rd Approximately 110,700 sq.ft. of Crossing & 80th Ave commercial space that will be anchored by a Canadian Tire, Mark’s Work Warehouse and The Keg Steakhouse restaurant Morgan Surrey, Hwy 99 A mixed-use urban development featuring Crossing & 24th Ave a 430,000 sq.ft. lifestyle centre that will include retail stores, big-box stores, a multiplex theater and restaurants Grandview Surrey, 24th Ave Approximately 800,000 sq.ft. of retail Corners & 160th St space and includes a 160,000 sq.ft. village area, 32,000 sq.ft. retail space in front of Home Depot, 65,000 sq.ft. adjacent to Wal-Mart - Wal-Mart will be 218,000 sq.ft. The Centre of Surrey, 7272 Phase I includes 80,000 sq.ft. of retail Newton & 7300 King space and Phase II has 20,000 sq.ft. George Hwy Current tenants include Save-On Foods, Shoppers Drug Mart and Tim Hortons Gateway Centre Langley, fronting 190,000 sq.ft. of retail space on a 15.59 onto the Langley acre site. Currently in discussion with a national anchor tenant that will use about By-Pass & 100,000 sq.ft. Glover Rd The Village at Langley, 200th A new shopping centre consisting of over Thunderbird St & 88th Ave 183,000 sq.ft. of retail and office space, Centre anchored by Market Place IGA, Famous Players, Shoppers Drug Mart, Vancity and Boston Pizza Big Bend Burnaby, Marine Large format retail consisting of 330,000 Crossing Way & Byrne Rd sq.ft. that will include Rona, Winners, Staples, Linens N Things, Shoe Co, PetSmart and Michaels Marine Way Burnaby, NE 275,000 sq.ft. of retail space, anchored by Market corner of PriceSmart, London Drugs and Canadian Marine Way & Tire Byrne Rd Lower Sumas Mtn Way and N Parallel Rd

Abbotsford

Commercial development totaling 114,700 sq.ft., and will be anchored by a food store and a drug store

FOR MORE INFORMATION, PLEASE CONTACT: JACKIE SMILEY KASIA HAJDUK DIRECTOR OF RESEARCH RESEARCH ANALYST OR (604) 630-3405 (604) 630-3386 KASIA.HAJDUK@JJB.COM JACKIE.SMILEY@JJB.COM

Progress Many tenants are open, and the rest of the centre will complete in July 2007

Phase I (80,700 sq.ft.) opening Feb 2007, and Phase II (30,000 sq.ft.) will start construction this summer Completion spring 2009

Home Depot is expected to open end of Jan 2007, True Canadian Superstore’s construction start has been delayed due to rising construction costs, rest of construction to start this spring Completion Nov 2007

Completion spring 2007

Phase I opened Dec 2006

Completion fall 2007

London Drugs and Canadian Tire opened in November 2006. PriceSmart will be will be opening in March, and the shopping centre’s expected completion is July 2007 Expected completion Q3 2008

800 - 475 WEST GEORGIA STREET, VANCOUVER, B.C. V6B 4M9 PHONE: (604) 684-7117 • FAX: (604) 684-1017 VISIT OUR WEBSITE: WWW.JJB.COM/VANCOUVER

MAJOR RETAIL CONSTRUCTION SUBURBS YEAR END 2006

9 8

7 2

5 1 6

Cloverdale Crossing

Gateway Centre

Scott Road Crossing

The Village at Thunderbird Centre

Morgan Crossing

Big Bend Crossing

Grandview Corners

Marine Way Market

The Centre of Newton

10 Lower Sumas Mtn Way and N Parallel Rd

800 - 475 WEST GEORGIA STREET, VANCOUVER, B.C. V6B 4M9 PHONE: (604) 684-7117 • FAX: (604) 684-1017 VISIT OUR WEBSITE: WWW.JJB.COM/VANCOUVER VANCOUVER • Toronto • Calgary • Edmonton • Winnipeg • Montreal • Mississauga • Nanaimo • Burlington • Halifax • Kingston • London • Markham • Niagara • Ottawa • Regina • Waterloo • Victoria All information has been obtained from sources considered to be accurate but is not guaranteed and is subject to conditions at the time of any transaction taking place. Properties are submitted subject to prior sale or lease, withdrawal or changes without notice.