Retailers are eyeing Saskatoon
Monday, 04 February 2013 00:00
More and more national, and international, retailers are eyeing Saskatoon as a place to do business.
"There has been more interest from national retailers and even more are ready to enter the market this year," says Alvaro Campos, market research analyst with ICR Commercial Real Estate.
ICR released its Saskatchewan Retail Survey which showed retail sales in the province continue to be a driving factor to the economy. Record retail sales were posted in 2012, and the report said 2013 should see more of the same.
"Vacancies have remained stable and competitive," Campos said.
Saskatoon had the lowest retail vacancy rate in the province at close to two per cent, followed by Regina at 2.52 per cent, North Battl-eford at 3.08 per cent, Prince Albert at 3.60 per cent, Yorkton at 3.89 per cent and Lloydminster at 3.94 per cent.
Campos said 2013 will be another year of solid retail absorption and low vacancy. The overall vacancy decreased by 51 basis points from the previous quarter to 1.97 per cent.
The report said population growth and an increase in personal income will contribute to continued growth of retail sales. A number of retail projects are well underway in the city and many will come on stream this year.
A pair of Target stores are scheduled to be open this spring or early summer in Saskatoon (The Mall of Lawson Heights and The Centre at Circle and Eighth). Another will open in Regina. Re-development costs are pegged at $10-million per location and each Target store will employ between 150 to 200 people.
Plans for a new North Downtown neighbourhood were unveiled at the Farmer's Market on the weekend. The city is seeking input for a 240-acre parcel of land in the north downtown.
"With a new neighbourhood comes the need for new amenities," Campos said, adding, "If you have a neighbourhood in the middle of the city, but no grocery store, nobody is going to want to live there."
Gateway Plaza, located in Willowgrove Square, is currently under construction. It will be a three-storey building featuring two storeys of residential condominiums with main floor retail consisting of 17 bays totalling 25,000 square feet. Occupancy is anticipated to begin late summer.
"The retail there is smaller bays set to attract clients in the range of 800 to 1,000 square feet," Campos said.
Concorde's development of Phase I at Millar Crossing, located on 51st Street, is complete with construction for Phase II underway. Phase II will feature 40,000 square feet of space and will include an Original Joes restaurant.
Future construction is expected to begin in the summer of 2013 for 8,000 square feet of retail space attached to the new Safeway in University Heights.
"Safeway is also hopefully coming out with a gas bar," Campos said.
Other construction projects being completed in 2013 include Preston Crossing Walmart's 30,000 square foot expansion, a Great Canadian Oil Change at the corner of Eighth Street and Louise Avenue, retail space right across the street on Eighth Street and Louise and a new CIBC on Wellman Crescent.
The report said Saskatoon's retail market will continue to prosper in 2013 with vacancy rates remaining around two per cent. The report forecasts limited construction while absorption is expected to be positive but not as noteworthy as the 278,500 square feet in 2012.
Low vacancy rates will mean higher lease rates, the report said.
"Average market rates for 2012 rose by eight per cent, this trend will continue in 2013. Fuelled by high demand, new retail developments are expected to attract lease rates in the range of $25 per square foot (PSF) to $33 PSF, while existing vacancies range from $18 PSF to $25 PSF.
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