The Canadian

Retail Real Estate Market

Presented to:

2012 Real Estate Forum

Presented by John G. Crombie

National Retail Director Cushman & Wakefield Ltd.

416-756-5448

Retail Real Estate

Canadian Retail Market – Basic Facts

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Retail in Canada

Basic Facts!

Retail Sales in Canada

In 2011, retailers sold an estimated $456.3 billion worth of goods and services.

Record high sales of Food & Beverage in 2011 with $104.3 billion.

Employment

Retail sector is Canada’s largest employer. 12.5% of Canadian jobs

Retail Stores in Canada

• 220,000 retail establishments

• 2,724 shopping centres (72 super regional) – 505 million SF

(average size Shopping Centre – 186,000 SF)

• 487 power centres - 162 million SF

(average size Power centre – 333,000 SF)

Top 100 Retailers in Canada control over 70% market share

<50% of Canada’s Leading Retailers are Foreign Owned & Operated (largely US)

Top 5 Foreign Owned Retailers in Canada

• Wal-Mart, Costco, Safeway, NRDC Equity Partners (HBC) & Home Depot

• Controls 19% of total retail sales (1,423 stores)

Retail Real Estate

Consumer Confidence, Retail Sales

- Canada & US

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Canadian Consumer Confidence

Three Year Trend

Source: J.C. Williams

50

55

60

65

70

75

80

85

90

95

100O

ct-

09

No

v-0

9

De

c-0

9

Ja

n-1

0

Feb

-10

Ma

r-1

0

Ap

r-1

0

May-1

0

Ju

n-1

0

Ju

l-1

0

Au

g-1

0

Se

p-1

0

Oct-

10

No

v-1

0

De

c-1

0

Ja

n-1

1

Feb

-11

Ma

r-1

1

Ap

r-1

1

Ma

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1

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n-1

1

Jul-11

Au

g-1

1

Se

p-1

1

Oct-

11

No

v-1

1

De

c-1

1

Ja

n-1

2

Feb

-12

Ma

r-1

2

Ap

r-1

2

Ma

y-1

2

Ju

n-1

2

Ju

l-1

2

Au

g-1

2

Sep-1

2

Con

fide

nce

In

de

x (

20

02

=1

00

)

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Canada vs. U.S. Consumer Confidence

0

20

40

60

80

100

120

Ja

n-0

5

Apr-0

5

Ju

l-05

Oct. 0

5

Ja

n. 0

6

Ap

r. 06

Ju

l. 06

Oct. 0

6

Ja

n. 0

7

Ap

r. 07

Ju

l. 07

Oct. 0

7

Ja

n. 0

8

Ap

r. 08

Jul. 0

8

Oct. 0

8

Ja

n. 0

9

Ap

r. 09

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l. 09

Oct. 0

9

Ja

n. 1

0

Ap

r. 10

Ju

l. 10

Oct. 1

0

Ja

n. 1

1

Ap

r. 11

Ju

l. 11

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l-12

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su

me

r C

on

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nce

(20

02

=1

00

) Canada

U.S.

Source: J.C. Williams/ICSC

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Canadian Retail Sales

Seasonally Adjusted

Source: Statistics Canada

$30

$31

$32

$33

$34

$35

$36

$37

$38

$39

$40

July

Janu

ary

July

Janu

ary

July

Janu

ary

July

Janu

ary

July

Janu

ary

July

(bill

ion

s)

2007 2008 2009 2010 2011 2012

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Canadian Retail Sales Geography - 2011

92% of sales in Western & Central Canada

Source: Statistics Canada,

Western Canada (34.4%)

Northern Canada (0.4%)

Eastern Canada (7.5%)

Quebec (22.4%)

Ontario (35.4%)

Alberta = 14.1%

British Columbia = 13.1%

Manitoba = 3.6%

Saskatchewan = 3.6%

Yukon = 0.1%

NW Territories = 0.2%

Nunavut = 0.1%

Nfld & Labrador = 1.7%

PEI = 0.4%

Nova Scotia = 2.9%

New Brunswick = 2.4%

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Canadian Retail Sales by Province – August 2011 2012

Year Over Year % Change

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

BritishColumbia

Alberta Prairies Ontario Quebec AtlanticCanada

Source: J.C. Williams

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Retail Sales Productivity – Canadian Malls

$400

$450

$500

$550

$600

$650

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: ICSC Research

Approximately $580 PSF

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Retail Sales Productivity – U.S. Malls

$320

$340

$360

$380

$400

$420

$440

$460

$480

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: ICSC Research

Approximately $440 PSF

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Recent Arrivals or Expressing Interest in Canada

American Retailers

European Retailers

Source: Cushman & Wakefield 2012

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Foreign Arrivals in Canada 1999 2011

Source: Ryerson University CSCA

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Canadian Retail Space – Square Feet Per Person

14.1

25.1

27.9

22.4

14.7

18

0

5

10

15

20

25

30

Vancouver Calgary Edmonton Toronto Montreal CanadianAverage

Square

Feet/C

apita

Source: Ryerson University CSCA

Shopping Centres & Big Box Stores (excludes street front)

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Retail Inventory by Age

Toronto & Ontario

0%

5%

10%

15%

20%

25%

30%

1950s 1960s 1970s 1980s 1990s 2000s

Toronto Ontario

Source: Cushman & Wakefield 2012

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Technology Affecting Our Industry

Omni-Channel Strategies

Evolving multi-channel

dynamics increase the

importance of a

cohesive omni-channel

strategy

QR CODE-DRIVEN VIRTUAL

SUPERMARKETS

(South Korea Subway Stations)

BRICK & MORTAR MOBILE

AMAZON.COM STORE

BRICK &

MORTAR

INTERNET

POP-UP STORE

BRICK &

MORTAR

SOCIAL MEDIA

Retail Real Estate

Rental Rates, Vacancy Rates

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National Retail

Rental Rates 2010 vs. 2011/12

Retail Product 2010 Average Net Rent

($/sq.ft.)

2011/12 Average Net Rent

($/sq.ft.)

CRU (New) $22-$28 $24-$30

Big Box (New) $16-$22 $16-$24

Pads (New) $30-$45 $32-$50

Street Front $25-$100 $30-$120

Source: Cushman & Wakefield 2012

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High Street Rental Rates

2011 vs. 2012 (Street Level)

City Submarket 2011 Average Net

Rent ($/sq.ft.)

2012 Average Net Rent

($/sq.ft.)

Vancouver Robson Street $240 $220

Calgary 17th Avenue SW $45 $50

Edmonton Whyte Avenue $40 $45

Montreal Saint-Catherine West (street

level) $160 $180

Ottawa Sussex Drive $50 $50

Toronto Bloor Street $315 $320

Toronto Queen Street $100 $100

Ottawa Sussex Drive $50 $50

Montreal Saint-Catherine West (street

level) $160 $180

Source: Cushman & Wakefield 2012

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Canadian Retail Vacancy Rate

0%

2%

4%

6%

8%

10%

12%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Global Real Estate Trends. Scotiabank Group, Global Economic Research (2011)

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Retail Vacancy Rates – Street Front

2008 2011

0%

2%

4%

6%

8%

10%

12%

Vancouver Edmonton Calgary Toronto Ottawa

2008 2009 2010 2011

Source: Cushman & Wakefield 2012

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Retail Vacancy Rates by Shopping Centre Type

2008 2011

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2008 2009 2010 2011

Power Centre Super Regional Regional Community Neighbourhood Strip

Average

Source: Cushman & Wakefield 2012

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This report contains information available to the public and has been relied upon by

Cushman & Wakefield on the basis that it is accurate and complete. Cushman &

Wakefield accepts no responsibility if this should prove not to be the case. No warranty

or representation, express or implied, is made to the accuracy or completeness of the

information contained herein, and same is submitted subject to errors, omissions,

change of price, rental or other conditions, withdrawal without notice, and to any

special listing conditions imposed by our principals.

Cushman & Wakefield Ltd. 2012