MARKETBEAT EDMONTON, AB Retail Q4 2019

YoY 12-Mo. ECONOMY Chg Forecast Edmonton’s real GDP growth is forecasted to slow in the range of 0.5% in 2019, as economic tensions such as ongoing trade wars, the fallout from both the provincial and federal elections that were held earlier in 2019, low oil production and plummeting oil prices $92,270* continue to challenge the investment activity in the province. Edmonton's unemployment rate climbed to 7.7% in November 2019 Median HH Income from 7.1% in October 2019 as increases in the labour force outpaced the region’s gains. Comparing the current year-to-date (YTD) total to the number of permits from the same period in 2018, non-residential permits in the city declined slightly by 0.6% as 2.1%* construction activity in the retail, commercial and institutional sectors slowed. Population Growth DEMAND Year-to-date Canadian retail sales have decreased 0.6% through to October 2019, compared to a 0.3% increase in 2018 during the 7.7% same period. Retail e-commerce remained strong with a 14.4% year-over-year increase in October 2019. Alberta posted gains in Unemployment Rate October 2019 with overall retail sales climbing by 4.2% month-over-month and 0.7% year-over-year. The Electronics & Appliances category saw the steepest decline in sales, by 16.3% year-over year, while Clothing and Accessories sales grew the most by 17% Source: Statistics Canada, The City of Edmonton *2019 Forecast year-over-year. Edmonton’s retail market was stable through the second half of 2019. The inevitable store closures observed both nation-wide and ALBERTA ECONOMIC locally have made several big retailers cautious in their plans for growth and expansion; however, certain companies seemed INDICATORS Q4 2019 unaffected by this trend. This year, we have seen big-box retailers and big brands such as Forever 21, Home Outfitters, Lowe’s and Payless ShoeSource either close locations or cease operations all together as these brands were unable to adapt to the evolving YoY 12-Mo. Chg Forecast retail landscape. Restaurant chains such as Tony Roma’s and Red Robin also shut their doors as more Edmontonians push buying local and are supporting locally owned restaurants over corporate chains. However, some of these spaces have already been 0.6%* backfilled by retailers that promote unconventional features to their services such as engaging and experiential retail, revamped GDP Growth brick-and-mortar stores, and e-commerce strategies.

West Edmonton Mall has welcomed over 10 new retailers and over 5 new food retailers in 2019 with new ideas to engage the consumers. Examples include Canada Goose opening its 5,000-square foot (sf) space and having the country’s largest ‘cold room’, 3.0% Uniqlo occupied the former 17,000-sf space of Murale, Laura, Brown Shoes, and Evelyn Charles occupied 10,000 sf of the former Housing Starts Target location, and Aurora Cannabis opened its 11,000-sf flagship store and experience centre. In addition, Mayfield Toyota is November (annualized) anticipated to transform part of a wing, approximately 117,000 sf, in the mall and will include an automotive experience centre along with the construction of a 200,000-sf car detailing and service centre on the northeast corner of the West Edmonton Mall 0.7% As housing starts remain competitive in the city, strip malls and new retail development are mostly concentrated in the suburban Retail Sales Growth market – looking to offer basic needs and services to both existing and new communities in the area. There also has been an YOY Change increase of interest in opening ethnic stores or restaurants to serve the city’s diverse community. Notably, in conjunction with the Source: Statistics Canada, Government of Alberta, opening of the first Jollibee restaurant in Alberta; Seafood City, a Filipino grocery chain, will occupy the former Home Outfitters Treasury Board and Finance located at Stony Plain Road in West Edmonton and is anticipated to open in summer 2020. *2019 Forecast PRICING Asking rents remain stable across the city year-over-year. Downtown Edmonton asking rates range from the low $20s to high $30s per square foot, depending on the property’s location and condition. Asking rates of new product in developing communities in the suburban markets such as Cy Becker, Ambleside Centre and Edgemont Landing remain higher than average with rents from the mid 30s to low 40s. MARKETBEAT EDMONTON, AB Retail Q4 2019

KEY PROPERTIES UNDER CONSTRUCTION

PROPERTY (Developer) SUBMARKET MAJOR TENANTS SF* PROPERTY TYPE

Currents of Windermere Southwest / Completed Walmart, Cabela’s, Home Depot 1,200,000 Regional Centre

Manning Town Centre & Village Northeast Canadian Tire, Lowe’s, Cabela’s 850,000 Regional Centre

Sunwapta Centre Northwest LA Fitness, Lowe’s 531,924 Regional Centre

Erin Ridge Shopping Centre St. Albert Costco, Lowe’s 480,971 Regional Centre

Harvest Pointe Shopping Centre Southeast Walmart, Sobeys 375,000 Regional Centre

Albany Market Square Northwest Walmart 352,269 Regional Centre

Heritage Valley Shopping Centre Southwest Superstore, Shoppers 303,472 Regional Centre

Ice District Central Loblaws City Market, Rexall 300,000 Entertainment District

Hollick Kenyon and McConachie Plaza Northeast Sobeys, Shoppers, Shell, Petvalu 163,000 Regional Centre

Costco – Stony Plain Northwest Costco 127,000 Big-Box Store

Windermere South Southwest Superstore 120,000 Regional Centre

Tamarack Common Southeast Sobeys, RBC, Browns Socialhouse 114,000 Community Centre

Griesbach Village Northwest Shoppers Drug Mart 110,622 Community Centre

Jensen Lakes Crossing St. Albert Landmark Cinemas 104,999 Regional Centre

KEY LEASE TRANSACTIONS Q4 2019 CWEDM RETAIL TEAM PROPERTY SUBMARKET TENANT SF TYPE +1 780 420 1177 [email protected] West Edmonton Mall Northwest Mayfield Toyota 117,000 Lease West Edmonton Mall Northwest The Brick 55,000 Lease cwedm.com West Point Centre Northwest Seafood City 33,000 Lease Whyte Avenue and 105th Street Strathcona Winners 24,000 Lease A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION West Edmonton Mall Northwest Aurora Cannabis 11,000 Lease Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, KEY SALES TRANSACTIONS Q4 2019 the firm had revenue of $8.2 billion across core services of PROPERTY SUBMARKET SELLER / BUYER SF PRICE / $ PSF property, facilities and project management, leasing, capital 219 & 235 East 42nd Street Grand Central Pfizer / Alexandria Real Estate Equities 1,175,000 $370M / NA markets, valuation and other services. 540 West 26th Street Chelsea Savanna / Ramrock Real Estate 164,000 $257.0M / $1,567 183 Madison Avenue Murray Hill Tishman Speyer Cogswell-Lee 274,413 $222.5M / $802 ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed 219 & 235 East 42nd Street Grand Central Pfizer / Alexandria Real Estate Equities 1,175,000 $370M / NA to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. 173 Madison Avenue Murray Hill Tishman Speyer 274,413 $222.5M / $802