Avison Young Calgary Retail Report (Mid-Year 2011)

Page 1

The Retail Report

Retail Sales ($000,000)

Unemployment Rate (%)

1.7%

1.4%

Overall

NE

NW

SE

SW

(39.1 Million SF)

(9.7 Million SF)

(9.1 Million SF)

(12.6 Million SF)

(7.7 Million SF)

U N E M P L O Y M E N T

April-11

March-11

January-11

February-11

December-10

October-10

November-10

September-10

July-10

9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

August-10

May-10

June-10

April-10

March-10

January-10

February-10

December-09

October-09

November-09

September-09

July-09

August-09

May-09

June-09

April-09

March-09

January-09

February-09

December-08

October-08

November-08

September-08

July-08

August-08

May-08

June-08

April-08

S A L E S

1.7%

Alberta Retail Sales and Unemployment Rate

5,400 5,300 5,200 5,100 5,000 4,900 4,800 4,700 4,600 4,500

March-08

R E T A I L

Sources: Statistics Canada, Government of Alberta

Retail Sales Trendline

Alberta Retail Sales and Wages & Salaries

Wages and Salaries ($000,000)

Retail Sales ($000,000)

December-10

November-10

October-10

August-10

September-10

July-10

June-10

May-10

April-10

March-10

February-10

January-10

December-09

November-09

October-09

September-09

July-09

May-09

June-09

April-09

March-09

January-09

February-09

December-08

November-08

October-08

August-08

September-08

July-08

June-08

S A L E S

10,400 10,200 10,000 9,800 9,600 9,400 9,200 9,000 8,800

5,400 5,300 5,200 5,100 5,000 4,900 4,800 4,700 4,600 4,500

May-08

R E T A I L

April-08

In May, Tiffany & Co. opened its first store in Calgary; its fourth location in Canada. The 4,100 square feet store in Chinook Centre’s newly expanded wing is just yet another indication of Calgary’s growing global recognition as a luxury retail destination. The market is also upbeat in the

2.0%

March-08

The demise of brick and mortar video stores has been well documented, evident in the downsizing of Rogers Videos and closing of Hollywood Videos. With Blockbuster Canada in receivership, up to one-third of all locations are expected to close with 7 announced for Calgary. The resulting vacancies present additional opportunities for retailers, with many of the locations having been snapped up by tenancies such as financial institutions, Bulk Barn and Sherwin Williams.

Calgary Retail Q2 2011 Vacancy Rates

3.9%

January-08

Competition between US and Canadian retailers has translated into takeovers and consolidations. While possibilities exist for the closing of selected store locations due to market coverage duplication, tenant demand exists to absorb any available space. While the expansion of large US retailers into the local market place is certainly a factor, Canadian retailers are also playing a huge part. Strong retail sales activity has translated into high demand for quality retail space.

SF)

February-08

algary’s retail real estate market is on a strong course due primarily to continued growth in retail sales and downward trend in unemployment. Retail sales in Alberta increased by 7.4% to $5.24 billion for April 2011 on a year to year basis. Alberta’s average weekly earnings remain the highest of all provinces at $1,036, substantially higher than the national average of $877. A recent report released by KubasPrimedia also found Calgarians to be the most optimistic in the country, with 60% of consumers stating that the economy is improving. While rising food and gasoline prices have cooled consumer spending, solid economic fundamentals have translated into low vacancy and vibrant market activities.

January-08

C

Mid-Year 2011

food and restaurant sector. Five Guys Burger & Fries has plans to open 8 or more locations in Calgary, while Buffalo Wild Wings, the Zagat ranked number 1 US sports bar, will open its first restaurant in 2012. Other companies on the expansion front include Good Earth, Dollarama, Báton Rouge, Pet Valu and Cora’s Breakfast & Lunch. In the downtown core, Stephen Avenue has been reinvigorated as a safe and pleasant pedestrian outdoor mall. Both the variety and quality of retailers have improved, evident through renovation projects such as The Core, Venator (adjacent to Scotia Centre), and facelift of the King Henry VIII pub building next to Flames Central. (813,000

February-08

Calgary Retail Outlook

What’s on the Horizon

Future Projects: Stampede Trail

FOCUS: Beacon Heights

August-09

US Retailer Expansion

W A G E S / S A L A R I E S

Sources: Statistics Canada, Government of Alberta


AVISON YOUNG The Retail Report - Mid-Year 2011

The US Retailer Expansion

T

he trend of US retailers entering the Canadian market through expansion or takeovers can be attributed to a number of factors. Particular incentives include Canada’s proximity to the US market, a common language, and strong economic fundamentals. Scarcity in quality Canadian retail real estate has led to strategic acquisitions by US retailers. Walmart’s acquisition of 120 Woolco stores in 1994, and Best Buy’s acquisition of Future Shop in 2001 are two prime examples. This is a direct reflection of the high value of retail properties in Canada. Target, the number 2 US retailer’s $1.83 billion takeover of Canadian leases on 220 Zellers locations certainly attracted attention in January. Target has subsequently announced the first 105 Zellers locations slated for conversion (including 6 in Calgary) with up to $10-million planned for the remodelling and renovation of each selected location. Another notable entry into the Canadian market is the purchase of Calgary based Liquidation World by Big Lots Inc., a US closeout retailer with 1,405 stores. The transaction provides Big Lots with exposure to the Canadian market with Liquidation World’s existing 92 locations across the country, including 3 in Calgary. Other large US retailers without a Canadian presence with potential expansion plans include Nordstrom, J.C. Penny, Kohls, Walgreen, and Macy’s, while rumoured potential targets include Jacob and Reitmans. Partly in response to potential cross boarder competition, Canadian Tire announced its purchase of Calgary based Forzani Group in May.

FOCUS: Beacon Heights

B

eacon Heights Shopping Centre is a new 10acre power centre located adjacent to Beacon Hill Centre in Northwest Calgary. Easily accessible

via Sarcee Trail and Sherwood Boulevard NW, immediate surrounding communities include Sherwood, Hamptons, Citadel, and Spy Hill. Anchor tenants include CIBC and Optics International, with neighbouring tenants including Canadian Tire, Costco, Golf Town, Home Depot and Future Shop, amongst others. The development has a primary trade population of 175,000 with a secondary trade population of 300,000. The extension of Sarcee Trail to 144th Avenue is expected to encourage future residential developments in the area, in turn benefiting commercial developments in the region.

include health-oriented retail, restaurants and a hotel, amongst others. The proposal takes advantage of the opportunity to monetize underutilized lands to take advantage of Calgary’s favourable retail real estate market. In East Village, the vision to transform this long neglected area into an urban village continues to take shape. In February, Calgary Municipal Land Corporation announced a major land development deal for approximately 600,000 square feet of mixed use multi-family and retail. Combined with a previous announcement from October 2010, a total of $600 million will be invested into mixed use development in the area. This brings new retail opportunities in the heart of the city, along with desirable demographics associated with multi-family developments.

Beacon Heights - Architect’s rendering

Future Projects

A

critical part of the Calgary Stampede Park expansion and redevelopment, the Stampede Trail development will add 150,000 square feet of retail space situated in the heart of Stampede Park. Stampede Trail is developed by Alberta Development Partners with Avison Young acting as the exclusive leasing agent. Leasing activity has really picked up since latter 2010 and the momentum has carried on through 2011. An announcement for construction could potentially take place in late 2011, early 2012. WinSport’s proposed retail/commercial development will add approximately 400,000 square feet of retail space at the Canada Olympic Park. Subject to city approval on changes to the COP area structure plan, WinSport is hopeful for construction to begin in 2012. Preliminary plans

Stampede Trail - Architect’s rendering

Average Weekly Earnings March 2011 $1,100

$1,036

$1,000 $900

$877

$800 $700 $600 $500

Sources: Statistics Canada


AVISON YOUNG The Retail Report - Mid-Year 2011

Calgary Retail Market - New Developments Timing

5

Skyview Town Centre (Country Hills Blvd. NE)

LaCaille Group

500,000

Phased

6

Easthills

Trinity

880,000

Phased

7

Deerfoot Meadows Village

Ivanhoe Cambridge

300,000

Proposed

8

South Trail

Shepard Development

9

Mahogany

10

5 25

1

IL

STONEY TRA

BE

DD

Gates of Walden

Royop

68,000

2011 +

13

Legacy

West Creek

700,000

Proposed

14

NWC Macleod Trail / 210th Avenue SW

IKO

300,000

Proposed

15

Silverado Marketplace

Ronmor

106,000

2011 +

16

Silverado Square

Axis

100,000

Proposed

17

7337 Macleod Trail SW

Telsec

18

Currie Barracks

Canada Lands Corp.

200,000

Proposed

19

Crestmont

Qualico

400,000

Proposed

20

Sweet Lands

Melcor

400,000

Proposed

21

Bow Valley Crossing

Loblaws

700,000

Proposed

22

Greenbriar

Melcor

51,000

Proposed

23

Canada Olympic Park

Trinity

400,000

Proposed

75,000

180,000

Stampede Trail

Alberta Development

25

Royal Oak Park

Certus

74,000

2011 +

26

Beacon Heights

Cidex

140,000

2010 +

27

Sage Hill

RioCan

300,000

2012 +

28

Sage Hill Farm

LaCaille Group

100,000

Proposed

29

Creekside

Hopewell

30

Evanston Towne Centre

Qualico

2014 +

31

Keystone (Stoney Trail / Harvest Hills)

Brookfield

32

Gates of Panorama

Royop

33

Elbow Valley

Hopewell

34

CrossIron Commons

Ivanhoe Cambridge

50,000

2011 +

136,000

2011 +

IV DR ILL

TR A

IL

SE H NO

22 23

OLD BANFF COACH ROAD

32 AVENUE

16 AVENUE

16 AVENUE

ME

MO

17 AVENUE

GL

EN

33

MO

RE

TR

AIL

RIA

LD

BOW TRAIL

RIV

VE

MEMORIAL DRI

E

18

2011 +

94,000

Proposed

17 HERITAGE DRIVE

7

GLENMORE TRAIL

SOUTHLAND DRIVE DEE

RFO

ANDERSON ROAD

OT TR

114 AVENUE AIL

8

10 9

SPRUCE MEADOWS TRAIL (22X)

Phased CLE MA

16 15

TR OD AIL

14

Š 2011, Avison Young Real Estate Alberta Inc. The information contained herein was obtained from sources deemed reliable and, while believed to be correct; is not guaranteed by Avison Young.

6

17 AVENUE

24

Proposed

59,000

411,000

21

2011 +

24

1,000,000

MCKNIGHT BOULEVARD

20 19

TRANS CANADA HIGHWAY

AIL

12

2

L

IL

Phased

AI

TRA

703,000

TR

OD

Brookfield

LD

MA CLE

Seton

L

14 STREET

11

AI

14 STREET

2013 +

TR

IL

60,000

HI

CROWCHILD TRAIL

Brookfield

4

PP IT RA

Auburn Bay

GT ON

NA

Phased

IN

SH AG A

350,000

CR OW C

SARCEE TRAIL

Hopewell

E

2011 +

SA RC E

60,000

COUNTRY HILLS BOULEVARD

84 STREET

Phased

STONEY TRAIL

Phased

1,000,000

STONEY TRAIL

3

SE STONEY TRAIL OPENS 2013

1,500,000

Trinity

31

32

84 STREET

WAM / AIMCo

Jacksonport

26

52 STREET

Stonegate

4

29

BARLOW TRAIL

3

30

27 28

BARLOW TRAIL

Proposed

OT T R

300,000

RFO

Rencor

DEE

Bingham Crossing

RA IL

Proposed

2

FO OT T

94,000

ER

Est. SF

Melcor

DE

Developer

The District at North Deerfoot

34

BLACKFOOT TRAIL

Sites

1

E

Site

HIGHWAY 566

12 13

11


AVISON YOUNG FEATURED RETAIL LISTINGS

Stampede Trail Up to 180,000 Sq. Ft. Mixed Use Retail Development Retail Leasing Opportunities

Sierra Springs

Beacon Heights Up to 256,000 Sq. Ft. 2,000 - 35,000 Sq. Ft. Airdrie’s 43 acre Retail Development 10 acre Retail Power Centre Retail Leasing Opportunities Retail Leasing Opportunities

Crowfoot Village

14,518 - 22,000 Sq. Ft. Suburban Retail Head Lease Opportunities

1,299 - 4,090 Sq. Ft. Within Crowfoot Towne Centre Retail Leasing Opportunities

Bruce Bynoe 403.232.4302 bruce.bynoe@avisonyoung.com

New Proposed Office Bldg

Main: 2,300 SF & Plus 15: 7,500 SF Downtown Retail Opportunities

6311 Centre Street S

AY CALGARY RETAIL TEAM

608 7th Street SW

6404 Bowness Road NW 4,436 Sq. Ft. Neighbourhood Retail Strip Retail Leasing Opportunity

For full brochures, please visit us at: www.avisonyoung.com

Jeff McGinley 403.232.4305 jeff.mcginley@avisonyoung.com 8303 Fairmont Drive SE 3,700 Sq. Ft. Acadia Shopping Centre Retail SubLease Opportunity

Amela Palić 403.232.4315 amela.palic@avisonyoung.com Alex Mandolidis 403.232.4321 alex.mandolidis@avisonyoung.com Doug Johannson 403.232.4314 doug.johannson@avisonyoung.com Jaclyn Snell 403.232.4323 jaclyn.snell@avisonyoung.com

AY CALGARY BUSINESS CONDOMINIUM TEAM Pali Bedi 403.232.4311 pali.bedi@avisonyoung.com Fred Clemens 403.232.4312 fred.clemens@avisonyoung.com © 2011, Avison Young Real Estate Alberta Inc. The information contained herein was obtained from sources deemed reliable and, while believed to be correct; is not guaranteed by Avison Young.

AVISON YOUNG The Retail Report - Mid-Year 2011


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