canada retail real estate report spring 2012

8/2/2019 Canada Retail Real Estate Report Spring 2012

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The Retail Report CanadaSPRING 2012 - EDITION

Accelerating success.


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The Retail Report you are about to enjoy is our answer

to the retail industrys request or uncommon

knowledge. Leveraging our vast retail resources, we

have brought together proessionals rom across the

country and across multiple disciplines to uncover

inormation and insight to help you guide your business.

With the recent inux o U.S. retailers into the Canadian

market, our retail landscape is undergoing dramatic

change. As a result, we have taken an in depth look at what is driving this trend andwhat it means or retailers as well as owners and developers o retail space. Additionally,

we have taken a look at some o the astest growing cities in Canada and some o the

opportunities this growth creates. We hope you nd the ollowing inormation both

insightul and helpul.

At Colliers, we strive to accelerate the success o our clients through our spirit o

enterprise. Whether you are a retailer, owner or developer, we access the right services

to meet your retail space requirements. Our collaborative nature and our drive to

discover uncommon knowledge ensures we provide our clients with industry leading

solutions. We look orward to sharing our knowledge with you and your organization.

Message rom the National Retail Leader

Drew Keddy

Vice President | Canada

Colliers International


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Colliers International P.

The biggest stories in Canadian retail continue to be the chess game major U.S. department stores are playing at Canadian mallsIt started 18 months ago with Target acquiring up to 220 Zellers leases, ollowed by Walmart picking up 39 o these Zellers leasesin locations that did not meet Targets growth strategy. Lately, the industry has been abuzz because o Cadillac Fairviews purchaseo three Sears leases or $170 million; and there is speculation surrounding how Cadillac would ll the vacated space at PacicCentre Mall in Vancouver, Chinook Centre in Calgary and Rideau Mall in Ottawa three o the most productive retail properties onthe continent. Cadillac Fairview had not announced an ocial plan at the time o writing, but prevailing opinion has a single U.Sdepartment store such as Nordstroms or Macys taking over all three prime spaces. However, there is tremendous opportunity in eachproperty, and the ultimate plans may include a variety o stores, redevelopment or even a mix o retail and non-retail uses.

Target is but the most recent top-ten U.S. retailer to make a move into Canada. The department store behemoth will open its rsblock o stores in 2013 and will join other household names such as Walmart, Home Depot, Costco and Best Buy, all o which haveoperated Canadian stores or years.

There are mixed economic signals coming out o the U.S., including several months o strong job growth mixed with continuedworries about the housing industry. There are ew economic drivers that can match the strength o a condent American consumerand since 2008, Americans have been demonstrating their skill as savers rather than spenders. The act that consumer spendingrepresents approximately 70% o U.S. GDP means that consumer condence is a key ingredient or sustained U.S. recovery. Howevercondence is a rare commodity i a stable housing market (and the opportunity to leverage equity rom it) is not present. As a resultmajor U.S. retailers are likely to continue to seek oreign opportunities or stable growth and network expansion. On a comparativebasis, while Canadians population and spending growth rates averaged across the country are expected to continue at a steady pacethe value o the Canadian dollar, inuenced largely by natural resources, could gain additional strength relative to the U.S. dollar in2012. U.S. retailers looking or strong undamentals based on steady population growth and solid employment have a number o

Canadian markets rom which to choose.

Canadian Markets are Fertile Ground

for Investment

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Canada ($ U.S./SF) United States ($U.S./SF)

Canadian vs. U.S. Mall Performance (1997 to 2011)Canada still represents the easiest international move orAmerican business. Despite the challenges nding space andseveral operational diferences that Canadian markets entail,in the eyes o an American retailer, Canadas retail sector hasample room to grow.

The challenge or expanding retailers (and the opportunityor investors and developers) in many Canadian markets is ashortage o appropriate space. In Regina, Saskatchewan, orexample, where mall vacancy rates have been close to 0% ormonths and retail development sites are virtually non-existent,retailers are at out o luck i they are looking or space onthe citys main commercial thoroughare, Victoria Avenue East.Retailers and developers are looking to uture developments,which are two to three years down the road, as the citys supplyo readily available development sites has dried up, saysPreston Babey, Sales Associate at Colliers Regina.


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P. 2 THE RETAIL REPORT SPRING 2012

Challenge or Retailers Spells Opportunity or Developers and InvestorsRetailers serve shoppers. Landlords serve retailers. Whereas U.S.-based retailers have been eagerly taking over existing Canadianoor space and building more o their own, it has largely been Canadian developers and pension unds providing and managing

the space. That is changing, and Tanger Outlets, Simon Properties and Kimco rom the U.S., as well as London-based outlet maldeveloper McArthurGlen, are all looking to establish or increase their Canadian presence.

The preceding chart shows how the sales per square oot at U.S. shopping malls and Canadian shopping malls have compared to oneanother over the last 14 years. In 1997, Canadian shopping malls generated, on average, $442 o sales per square oot. Given that theCanadian dollar was worth about $0.72 U.S., the 1997 sales productivity rate was $319 expressed in U.S. dollars. At the time, U.Smalls were averaging sales o $354 per square oot, and consistently outperorming their northern neighbours, on average.

By 2004, however, these perormance rates converged atroughly U.S.$380 per square oot, and Canadian malls asa whole have, on average, been outperorming their U.Scounterparts by an increasing margin ever since. Accordingto data rom the International Council o Shopping Centers

between 2007 and 2010, the U.S. shopping centre squareeet per 100 residents dropped rom 2,391 square eetto 2,370 square eet. Over the same our-year period inCanada, the shopping centre square eet per 100 residentsgrew rom 1,379 square eet to 1,453 square eet. Thereis little doubt that in the current economy, the U.S. has asignicant oversupply o shopping centre space. Canadianproductivity levels per square oot continue to rise. A recendip in productivity in 2009 was ollowed by strong growthover the last two years. In 2011, Canadian malls werealmost 50% more productive on a ($U.S.) sales per squareoot basis.

Canadian mall productivity levels will likely level of asnew space is developed and consumers spending dollarsare spread amongst an increased number o stores. Thecommercial development industry in the U.S. has dipped toits slowest pace in generations, and as long as consumerspending continues to rise, the result will be moreproductivity at shopping malls. The impact this will haveon the Canadian retail landscape is that we will likely seean ever more Americanized commercial landscape. Outlemalls, which have not enjoyed the same degree o successin Canada as they have south o the border, will get moreattention as U.S. developers bring their outlet knowledge

to Canada. Finally, higher sales productivities translate tohigher lease rates, which in turn translate to higher valuesor retail properties. Notwithstanding regional diferencesin Canadian economies, cap rates will likely stay airly lowi domestic pension unds and REITs continue to snap uprevenue-producing properties, and are willing to exchangecapital on-hand or long-term income.


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These high line perormance and

supply numbers are only part o

the story. While the Canadian retai

environment is certainly appealing to

U.S. retailers and developers when theysee signicantly lower square eet per

capita on the supply side and higher

sales per SF in the shopping centers

we also have dierent tax structures, a

more challenging development process

and very sophisticated retailers, owners

and developers who have learned how

to operate efciently in this country.

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June 2011 dataCanada United States

Per Capita Retail Spending, U.S. and Canada Expressed in $U.S.

The ollowing chart shows the retail spending per capital in the U.S. and Canada since 1992, converted to U.S. dollars or comparisonFor the last 18 months, this chart has illustrated why many U.S. retailers are looking to establish Canadian stores. However, despitethe Canadian economys resiliency in the midst o the global recession, it is the U.S. consumer who has made great strides in the las

year. Both countries have experienced population growth o approximately 1 percent, but while Canadas retail sales grew at a steady3.6% rom 2010 to 2011, U.S. retail trade grew by 6.8% over the same period. The exchange rate between the two currencies hasbeen hovering close to parity, resulting in the comparable per capita spending o Canadians and Americans growing at a similar rateover the last year.


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Colliers Fall 2011 Retail Report or Canada included, or only the second time, a orecast o both ull-year and December retail

spending, and growth or the 10 major provincial markets. This orecast, made ollowing the release o June retail trade data, is a trendorecast based on an ongoing review o provincial monthly and quarterly spending patterns over the last decade.

The intent is simply to provide an alternative means o orecasting retail sales in Canadas provincial markets, which in turn, can helpguide short-term expectations and help owners, developers and retailers ne-tune their approaches to Canadian retail expansion odevelopment.

A orecast is only valuable, however, i it is reliable and i users are condent in its outputs.

Colliers Fall Report anticipated total 2011 retail sales or all retail categories (including automobile and gasoline sales) o roughly$454 billion. Actual national retail sales came in at just above $454 billion. Colliers orecast at the national level was of the markin volume terms, by roughly 0.04%.

1 3-digit NAICS codes or major retail categories, as tracked on a monthly basis by Statistics Canada.2 The Canada-Wide total includes all o the provincial gures listed, as well as sales or unlisted territories.

REVIEW OF 2011 FULL YEAR RETAIL FORECAST

Colliers 2011 Provincial Retail Forecast ReviewFull Year Forecast vs. Full Year Actual (All Retail Categories)

ForecastRank/Province

Colliers 2011 Forecast Actual 2011 Results Forecast vs.Actual Volume

Diferential2011

($Billions)% YOY

2011($Billions)

% YOY

1. Saskatchewan $16.21 7.7% $16.32 8.4% -0.71%

2. Alberta $63.66 6.4% $64.08 7.1% -0.65%

3. Newoundland $7.82 5.0% $7.83 5.1% -0.12%

4. New Brunswick $11.12 5.0% $11.11 4.9% 0.10%

5. PEI $1.84 4.2% $1.88 6.3% -1.98%

6. Manitoba $16.40 4.1% $16.48 4.6% -0.47%

7. Ontario $161.55 3.6% $160.62 3.0% 0.58%

8. Nova Scotia $13.01 2.8% $13.08 3.4% -0.54%

9. British Columbia $59.11 1.7% $59.48 2.3% -0.61%

10. Quebec $101.16 1.5% $101.56 1.9% -0.39%

Canada-Wide $453.97 3.6% $454.17 3.6% -0.04%

The Big 4 $385.49 3.2% $385.74 3.3% -0.06%Maritimes $33.80 4.1% $33.91 4.4% -0.31%

Net Prairies $32.60 5.9% $32.80 6.5% -0.59%

Source: Colliers International, Statistics Canada

The degree o accuracy at thenational level is largely drivenby how close Colliers salesorecasts were or the Big4 provinces, namely Ontario,Quebec, Alberta, and B.C.,which together account orroughly 85% o the nationssales volume. Colliersorecast o roughly $385.5billion or this key group,while actual 2011 sales came

in at about $385.7 billion.


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Outside the Big 4 provinces, Colliers orecast o $33.8 billion in sales or 4.1% year-over-year growth or the Maritime provincescame close to the actual mark o $33.91 billion in sales or a 4.4% increase over 2010.

As expected, Saskatchewan led the nation in year over year growth, though sales o $16.32 billion (8.4% higher than 2010) were verslightly better than the orecast, which called or $16.21 billion or 7.7% growth. Manitoba also edged out expectations, hitting $16.48billion (+4.6%) rather than the orecast $16.4 billion (+4.1%).

O more relevance to the shopping centre industry is how Canadian provinces ared in 2011 in terms o retail sales net o automobiland gasoline sales.

Colliers Fall 2011 Retail Report included a nationwide orecast o $297.28 billion or modest 1.0% year over year growth. The actuatally was $297.17 billion (+1.0%).

Again, this was driven by quite accurate orecasts or the Big 4 provinces o Ontario, Quebec, Alberta, and B.C., which combined o$254.54 billion in sales, beating expectations ($254.03 billion) by a slim margin.

The Maritimes also exceededexpectations or 2011, generatingyear-over-year growth o 1.2%on sales o $21.29 billion versusColliers orecast o 0.9% growthon sales o $21.23 billion.

2011 also brought good newsor the Prairie provinces oSaskatchewan and Manitobawhich more than met Collierssales expectations or 2011 in

the non-automotive and gasretail categories.

As expected, Saskatchewanled the nation with yearover-year growth o 5.4% onsales o $9.68 billion (versusorecast growth o 4.6% onsales o $9.61 billion). Manitobasales also beat expectationsreaching $10.73 billion in 201versus an expected gure o$10.61 billion.

3Colliers nationwide December orecast is treated as a whole and is not a direct sum o the individual provincial orecasts. This is due to the act that retail trade dator the unlisted territories are not readily available or all major categories.


Colliers 2011 Provincial Retail Forecast ReviewFull Year Forecast vs. Full Year Actual (Retail Net o Auto and Gas)



Diferential2011

($Billions)% YOY

2011($Billions)

% YOY

1. Saskatchewan $9.61 4.6% $9.68 5.4% -0.79%

2. Alberta $39.21 3.4% $39.23 3.5% -0.06%

3. Newoundland $4.85 2.7% $4.88 3.3% -0.66%

4. PEI $1.22 2.3% $1.25 4.7% -2.24%

5. Ontario $109.95 1.6% $109.57 1.3% 0.35%

6. Manitoba $10.61 1.1% $10.73 2.3% -1.15%

7. New Brunswick $6.79 1.0% $6.76 0.6% 0.45%

8. Nova Scotia $8.37 -0.3% $8.39 0.0% -0.26%

9. British Columbia $40.00 -0.3% $40.62 1.3% -1.55%

10. Quebec $64.88 -1.9% $65.12 -1.6% -0.37%

Canada-Wide $297.28 1.0% $297.17 1.0% 0.04%

The Big 4 $254.03 0.7% $254.54 0.9% -0.20%Maritimes $21.23 0.9% $21.29 1.2% -0.24%

Net Prairies $20.21 2.7% $20.41 3.7% -0.98%


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REVIEW OF 2011 HOLIDAY (DECEMBER) RETAIL FORECAST

When the rubber really hits the road in Canada is during the most important month o December, when retail property owners

and retailers across the country ramp up their promotional events and make key shits relating to operating hours and stangThough retailers in Canada are increasingly testing out earlier holiday sales promotions (ollowing the U.S. lead with its post-U.SThanksgiving Black Friday shopping event), which have resulted in higher than historical November sales numbers, December salesremain the key to a successul retail year.

I sales were distributed evenly rom month to month, then each month would see 1/12th o the years spending or 8.3%. While thisis certainly the case with a regular staple good such as gasoline (the national December sales o which represented 8.2% o the 2011total), most non-automotive-related retail categories, with the exception o building materials and garden equipment dealers, see apronounced holiday leap in December, as noted by the ollowing Canada-wide examples:

> Electronics and appliance stores: December 2011 sales o $2.07 billion (14.8% o annual 2011 sales)

> Clothing and clothing accessories stores: December 2011 sales o $3.73 billion (14.5% o 2011 sales)

> Sporting goods, hobby, book and music stores: December 2011 sales o $1.69 billion (14.9% o 2011)

Colliers 2011 Provincial Retail Forecast ReviewDecember Forecast vs. December Actual (All Retail Categories)



Diferential2011

($Billions)% YOY

2011($Billions)

% YOY

1. Saskatchewan $1.56 8.5% $1.57 8.9% -0.38%

2. Alberta $6.27 5.8% $6.43 8.4% -2.44%

3. Newoundland $0.79 5.1% $0.79 5.3% -0.21%

4. New Brunswick $1.08 5.7% $1.08 6.0% -0.26%

5. PEI $0.18 6.5% $0.18 10.3% -3.41%

6. Manitoba $1.60 4.0% $1.64 7.0% -2.83%

7. Ontario $16.38 3.3% $16.16 1.9% 1.32%

8. Nova Scotia $1.28 3.5% $1.30 5.3% -1.72%


10. Quebec $9.20 -0.3% $9.55 3.5% -3.62%

Canada-Wide $44.97 4.6% $44.76 4.1% 0.47%

The Big 4 $37.68 2.7% $38.04 3.7% -0.97%

Maritimes $3.32 4.7% $3.35 5.8% -0.99%

Net Prairies $3.16 6.2% $3.21 7.9% -1.64%


Colliers Fall 2011 Retail Reportor Canada also provided aorecast o December retailsales or each o the provincesas a means o gauging theupcoming strength o theCanadian retail holiday season.A summary o our provinceby province December retailorecasts, alongside actualperormance, appears in the

table to the right.


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Colliers expectation o $44.97 billion in December retail sales (and 4.6% year-over-year growth ) or Canada as a whole was closeto the mark, i not a tad bullish. Actual Canadian retail sales or December 2011 totaled $44.76 billion, or a similarly healthy increaseo 4.1% over 2010 volume.

The December 2011 retail story was also positive or non-automotive and gasoline purveyors, as Colliers national orecast o 3.9%year-over-year growth on sales o $32.75 bil lion exceeded actual results by a small raction.

4 Colliers nationwide December orecast is treated as a whole and is not a direct sum o the individual provincial orecasts.This is due to the act that retail trade data or the unlisted territories are not readily available or all major categories.

Colliers 2011 Provincial Retail Forecast ReviewDecember Forecast vs. December Actual (Net o Auto & Gas)



Diferential2011

($Billions)% YOY

2011($Billions)

% YOY

1. Saskatchewan $1.02 7.6% $1.03 8.6% -0.95%

2. Alberta $4.35 4.6% $4.44 6.7% -1.92%

3. Newoundland $0.56 3.5% $0.57 6.1% -2.44%

4. PEI $0.13 4.9% $0.14 10.3% -4.91%

5. Ontario $12.29 2.9% $12.28 2.8% 0.12%

6. Manitoba $1.13 2.7% $1.19 7.7% -4.62%

7. New Brunswick $0.74 3.6% $0.75 4.5% -0.92%

8. Nova Scotia $0.93 1.3% $0.95 3.9% -2.54%


10. Quebec $6.62 -0.6% $6.85 2.7% -3.27%

Canada-Wide $32.75 3.9% $32.71 3.8% 0.12%

The Big 4 $27.61 2.1% $27.96 3.4% -1.23%

Maritimes $2.35 2.7% $2.41 5.0% -2.14%

Net Prairies $2.15 5.0% $2.22 0.0% -2.92%


Some notable holiday retail sales highlights included:

> Saskatchewan and Alberta exceeding already high expectations, with actual year-over-year increases o 8.6% and 6.7%,respectively

> Ontario, by ar the largest retail market, very nearly hitting Colliers prediction o 2.9% growth over December 2010(actual was 2.8%)

> Manitoba and Quebec ar exceeding December expectations with actual year-over-year growth rates o 7.7%(versus 2.7% orecast) and 2.7% (versus -0.6% orecast), respectively


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CANADAS GROWTH ENGINE SHIFTS WESTWARD

Canadian Population Growth Summary (2006 - 2011)

Province or Territory2011

Population2006

Population% Change

(2006 - 2011)

Average AnnualIncrease inPopulation

% of CanadasAnnualGrowth

% of CanadianPopulation

(2011)

1. Alberta 3,645,257 3,290,350 10.8% 70,981 19.0% 10.9%

2. British Columbia 4,400,057 4,113,487 7.0% 57,314 15.4% 13.1%

3. Saskatchewan 1,033,381 968,157 6.7% 13,045 3.5% 3.1%

4. Ontario 12,851,821 12,160,282 5.7% 138,308 37.1% 38.4%

5. Manitoba 1,208,268 1,148,401 5.2% 11,973 3.2% 3.6%

6. Quebec 7,903,001 7,546,131 4.7% 71,374 19.1% 23.6%

7. Prince Edward Island 140,204 135,851 3.2% 871 0.2% 0.4%

8. New Brunswick 751,171 729,997 2.9% 4,235 1.1% 2.2%

9. Newoundland and Labrador 514,536 505,469 1.8% 1,813 0.5% 1.5%10. Nova Scotia 921,727 913,462 0.9% 1,653 0.4% 2.8%

11. Nunavut 31,906 29,474 8.3% 486 0.1% 0.1%

12. Northwest Territories 41,462 41,464 0.0% 0 0.0% 0.1%

CANADA 33,476,688 31,612,897 5.9% 372,758

Source: Statistics Canada Census gures, 2006, 2011.

For retailers, owners and developers alike, the two key drivers

o retail opportunity (beyond per capita spending power) are amarkets size and its rate o growth its ability, on an ongoingbasis, to attract new residents while maintaining as much aspossible o its existing resident base. As the ocial CanadianCensus 2011 population gures were released by StatisticsCanada in early February, it is an opportune time to derive somebig picture insights into the nations overall pattern o growth byregion, review which municipalities are recording the strongestgrowth rates by market size, and provide an indication o retailmarket implications.

Between 2006 and 2011, the Canadian population rose rom justabove 31.6 million to nearly 33.5 million, an increase o 5.9%(1.15% per year), which edged out the 5.4% change recordedover the 2001 to 2006 period. Immigration, which accounts orabout two thirds o the nations population increase, has helpedto make Canada the astest growing country in the Group o 8industrialized nations.

Canada is also clearly reorienting away rom Central Canada

and toward the West, with resource-driven economic gainsdriving job growth, and drawing both national and internationamigrants alike. The population o Canadas Western provinces including British Columbia, Alberta, Saskatchewan and Manitoba has, or the rst time, exceeded that o Quebec and the Atlanticprovinces (30.7% versus 30.6% o the Canadian populationrespectively).

Even more telling is that while British Columbia, Alberta andSaskatchewan comprise only 27% o Canadas population, theircombined average annual growth o 141,340 new residentsover the 2006 to 2011 period accounted or 38% o the nationsgrowth. Thus, while the Western provinces hit above theiweight in terms o growth over the past ve years, the Easterngiants did not are as well: Ontario: 38% o Canadas population, 37% o 2006 to 2011

growth (down rom 47% or 2001 to 2006) Quebec: 24% o Canadas population, 19% o 2006 to 2011

growth (little change rom 2001 to 2006)


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Saskatchewans turnaround is particularly notable, ater having lost an average o 2,169 residents per year over the 2001 to 2006period, and having gained an average o more than 13,000 net residents per year over the most recent Census period a story tiedto a sustained rise in commodity prices and related economic activity.

MUNICIPAL GROWTH LEADERS

While a look at the provincial level can ofer some important insights into regional growthpatterns, it is the municipal growth leaders within these provinces that are the true drivers oeconomic activity, population growth, and ultimately, development and expansion opportunities.

O the top ve municipalities with more than 300,000 residents, the astest growing is Brampton,

Ontario, whose population very nearly hit 524,000 in 2011. For a Canadian city o this size torecord a growth rate approaching 4% a year is an impressive eat.

Not ar behind is Surrey, British Columbia, a municipality that recorded nearly 3.5% averageannual growth rate over the 2006 to 2011 period and is ast approaching hal a million residents.Ontario placed a second signicant municipality in the top ve, with Markham, Ontario nearlyhitting a 3% growth rate or the period.

Alberta also saw its two major cities eclipse the 2% annual growth threshold, combining toattract an average o nearly 38,000 net new residents per year.


High growth rates such as these have signicant implications or a municipalitys retail salespotential and thus, its ability to attract interest rom both developers and retailers. Signicantmetro areas such as these are prime expansion markets or major retailers requiring signicanttrade area populations (o 100,000 to 250,000 residents).

Top CitiesOver 300,000

2011Population

2006Population

Annual

AverageGrowthRate %

Annual

AverageGrowthRate #

1. Brampton (Ontario) 523,911 433,806 3.85% 18,021

2. Surrey (British Columbia) 468,251 394,976 3.46% 14,655

3. Markham (Ontario 301,709 261,573 2.90% 8,027

4. Edmonton (Alberta) 812,201 730,372 2.15% 16,366

5. Calgary (Alberta) 1,096,833 988,812 2.10% 21,604

6. Laval (Quebec) 401,553 368,709 1.72% 6,569

7. Ottawa (Ontario) 883,391 812,129 1.70% 14,252


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One years worth o combined growth in these ve cities alone could support anadditional 250,000 square eet o clothing-related retail space. With Canadianconsumer tastes increasingly aligned with American consumer tastes, this levelo growth ofers expansion opportunities or both Canadian and U.S./internationaretailers.

A similar review was carried out to determine the astest growing municipalities

in both the medium (100,000 to 300,000 population) and smaller (50,000 to100,000 population) ranges, as these markets ofer a wealth o opportunity orboth existing and new retailers covering a broad range o categories. Thoughthe top three growth leaders in this range hail rom Ontario, with both Ajax andVaughan approaching annual growth rates o 4%, a number o Western citiesalso made the list, three o which are in British Columbia (Langley, Coquitlamand Burnaby). These medium-sized B.C. cities contributed an average annuapopulation increase o more than 8,500.

Not to be taken lightly, the astest growing municipalities in the smaller range arealso worth noting, ofering numerous opportunities or growth in a host o retaicategories. Such centres are signicant not only or their ability to attract newresidents and spending potential, but also or their movement toward important

population thresholds or various types o retailers.

While Milton, Ontario led the top 10 in this size range, our o these smaller, high-growth centres are in Alberta and two are in British Columbia again reinorcingthe increasing importance o growth in the west.

Population thresholds o 50,000 and 100,000 are signicant milestones that canput a municipality on a retailer or developers radar.

The retail market impact o such large, ast-growing markets can best be explained with an illustrative look at a specic retail categorysuch as clothing/apparel as calculated or the top ve municipalities with a population o more than 300,000:

Retail Implications of 2006-2011 Growth RateMunicipalities over 300,000 Population - Illustrative Clothing/Apparel Spending Impact

MunicipalityAverage Annual PerCapita Expenditure*

Average AnnualGrowth Rate (#)

Increase in AnnualClothing Spending ($M)

Warranted AnnualRetail Floor Area**

1. Brampton (Ontario) $1,294 18,021 $23.3 51,000

2. Surrey (British Columbia) $1,375 14,655 $20.2 38,000

3. Markham (Ontario $1,527 8,027 $12.3 27,000

4. Edmonton (Alberta) $1,771 16,366 $29.0 51,000

5. Calgary (Alberta) $2,184 21,604 $47.2 83,000

Source: * Environics 2011 household spending estimates. Colliers per capita calculations.** Based on assumed 100% il lustrative capture o incremental growth, est. sales productivity rates


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Colliers International P. 1

Top Cities

100,000 to 300,000

2011

Population

2006

Population

Annual Average

Growth Rate %

Annual Average

Growth Rate #

1. Ajax (Ontario) 109,600 90,167 3.98% 3,887

2. Vaughan (Ontario) 288,301 238,866 3.83% 9,887

3. Richmond Hill (Ontario) 185,541 162,704 2.66% 4,567

4. Terrebonne (Quebec) 106,322 94,703 2.34% 2,324

5. Langley (British Columbia) 104,177 93,726 2.14% 2,090

6. Coquitlam (British Columbia) 126,456 114,565 1.99% 2,378

7. Oakville (Ontario) 182,520 165,613 1.96% 3,381

8. Burnaby (British Columbia) 223,218 202,799 1.94% 4,084

9. Saskatoon (Saskatchewan) 222,189 202,408 1.88% 3,956

10. Whitby (Ontario) 122,022 111,184 1.88% 2,168

11. Kelowna (British Columbia) 117,312 107,035 1.85% 2,055

12. Gatineau (Quebec) 265,349 242,124 1.85% 4,645


Top Cities50,000 to 300,000

2011Population

2006Population

Annual AverageGrowth Rate %

Annual AverageGrowth Rate #

1. Milton (Ontario.) 84,362 53,889 9.38% 6,095

2. Wood Bufalo (Alberta) 65,565 51,496 4.95% 2,814

3. Grande Prairie (Alberta) 55,032 47,107 3.16% 1,585

4. Blainville (Quebec) 53,510 46,493 2.85% 1,403

5.New Westminster(British Columbia)

65,976 58,549 2.42% 1,485

6. Chilliwack (British Columbia) 77,936 69,217 2.40% 1,744

7. Strathcona County (Alberta) 92,490 82,511 2.31% 1,996

8. Lethbridge (Alberta) 83,517 74,685 2.26% 1,766

9. Aurora (Ontario) 53,203 47,629 2.24% 1,115

10. Brossard (Quebec) 79,273 71,154 2.18% 1,624

11. Fredericton (New Brunswick) 56,224 50,535 2.16% 1,138

12. Maple Ridge (British Columbia) 76,052 68,949 1.98% 1,421



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This document/email has been prepared by Colliers International or advertising and general inormation only. Colliers International makes no guarantees, representations or warranties o any kind, expressed or implied,regarding the inormation including, but not limited to, warranties o content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy o the inormation. Colliers Internationaexcludes unequivocally all inerred or implied terms, conditions and warranties arising out o this document and excludes all liability or loss and damages arising there rom. This publication is the copyrighted property oColliers International and /or its licensor(s). 2012. All rights reserved. This communication is not intended to cause or induce breach o an existing listing agreement. Colliers Macaulay Nicolls Brokerage Inc. (Vancouver

Retail Rental & Vacancy Rates by Major Market and Centre Type

Market Neighbourhood Regional Power Centre

CityNetRent

6MonthTrend

VacancyRate

6MonthTrend

NetRent

6MonthTrend

VacancyRate

6MonthTrend

NetRent

6MonthTrend

VacancyRate

6MonthTrend

VictoriaHigh $43 20% + $65 1% $42 14%

Low $15 0% $30 0% $25 0%

VancouverHigh $35 3% $135 8% $75 5%

Low $22 1% $30 0% $25 0%

KelownaHigh $30 4% $90 3% $40 3%

Low $20 4% $50 2% $30 3%

CalgaryHigh $40 3% $200 2% $40 1%

Low $22 2% $40 2% $18 1%

EdmontonHigh $38 3% $150 1% $23 2%

Low $25 3% $30 1% $16 1%

SaskatoonHigh $30 4% $40 3% $35 2%

Low $22 1% $30 2% $26 1%

ReginaHigh $26 8% $32 0% $32 1%

Low $23 7% $28 0% $26 1%

WinnipegHigh $26 6% $60 8% $28 2%

Low $18 0% $30 0% $20 0%

TorontoHigh $22 9% $145 3% $30 5%

Low $28 5% $60 1% $22 2%

OttawaHigh n/a 2% n/a 1% $30 3%

Low n/a 2% n/a 1% $25 3%

MontrealHigh $23 3% $44 4% $30 4%

Low $15 3% $25 3% $20 2%

Haliax

High $24 15% $74 2% $25 5%

Low $16 14% $25 1% $15 2%

Major Market DataThe data in the ollowing table came rom Colliers brokers and research specialists in each represented market. It is a survey oexpert opinions and is not represented as actual data. The inormation below was collected in response to Colliers understanding

that national chain retailers are looking or a single source o inormation on lease rates, vacancy rates and recent trends or majomarkets across the country. This table is a retailers rst step in market analysis; the second step is calling a local Colliers oce omore specic inormation and assistance.

Notes: Neighbourhood shopping centre lease rates are or a 2,000-square-oot, in-line unit with 10 to 12 oot ceilings and ground-oor entry. Enclosed regionashopping centre lease rates are or a 4000-square-oot unit. Power centre lease rates are or a 5,000 to 10,000-square-oot unit, which could be on a pad site, in acluster o CRUs or in-line in a strip.


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Colliers International Consulting (CIC) is an independent consulting group based in Vancouver, British Columbia. CIC specializes instrategic real estate analysis or Private and Public Sector clients both domestically and abroad. Our project experience spans a rangeo specializations in:

Strategic AdvisoryAcquisition/Divestiture StrategiesAsset & Portolio ManagementCompetitive AssessmentConsolidation AdviceFeasibility AnalysisHighest & Best Use StudiesMerchandisingPro Forma Development

Retail Inventory AnalysisRetail Locational AnalysisRetail Potential AnalysisRevitalization/Redevelopment StudiesSite Selection and RankingStrategic PlanningStrategic PositioningTrade Area Analysis

Development ManagementFacilities PlanningProject Budgeting/SchedulingTenant Improvements

First Nation AdvisoryCommunity PlanningEconomic DevelopmentGovernance

Public Consultation

Urban PlanningMunicipal Approval ProcessSite Planning & Concept Development

Colliers International Consulting (CIC)

Community ConsultationCommunity Workshops & ConsultatioFocus Groups

Market AnalysisAbsorption AnalysisCompetitive AssessmentDemand AssessmentDemographic Modeling

Demographic ProlingMarket Impact AssessmentResidential & Commercial MarketAnalysis

James Smerdon, Director, Retail and ConsultingDIRECT +1 604 685 4808

[email protected]

David Bell, Senior Associate, Planning and Retail ConsultingDIRECT +1 604 694 7243

[email protected]

Report prepared by:

James has 15 years o consulting experience, specializing in retail trends, strategy and orecastingHis consulting clients include Mountain Equipment Co-Op, Walton International, Brookeld ResidentiaGenstar Developers, and Stantec. James is co-chair o the organizing committee or the 2013 WhistlerICSC Conerence, and is a past presenter on the retail outlook panel at this event.

David brings to Colliers a wealth o experience in strategic retail planning garnered over his last 15years in the industry, including Canadian and international work on shopping centre repositioningcommercial land demand analysis or major planning nodes, and retail strategies or urban inner-citymixed-use districts. David recently completed a comprehensive retail strategy update or CalgaryMunicipal Land Corporations East Village project in Calgary a major inner-city mixed-useredevelopment efort that is now enjoying positive momentum.


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Nanaimo +1 250 740 1060

Victoria +1 250 388 6454

Vancouver +1 604 681 4111

Kelowna +1 250 763 2300

Calgary +1 403 266 5544Edmonton +1 780 420 1585

Saskatoon +1 306 664 4433

Regina +1 306 789 8300

Winnipeg +1 204 943 1600

Toronto +1 416 777 2200

Burlington +1 905 333 8849

Waterloo +1 519 570 1330

London +1 519 438 4300

Ottawa +1 613 567 8050

Montreal+1 514 866-1900

Moncton +1 506 870 2700

Haliax +1 902 422 1422

canada retail real estate report spring 2012

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