Retail 2017 Report

Metro Annual Retail Market Report Market Overview

METRO VANCOUVER MARKET The Metro Vancouver retail market continues to lead BC retail Retail demand shows no sign of slowing in 2017 as major mixed-use growth as we enter 2017. Industry demand is driven by retail developments with retail components as well as master-planned consumer sales which average $6.1 Billion per month in British communities begin construction this year. Columbia — the highest in Western Canada. In regards to the Despite a record year in commercial investment sales, the retail residential real estate industry; Metro Vancouver had its third investment market remained relatively stable during 2016 with sales highest selling year on record, despite an overall decline of 5.6% transactions totaling $1.48 Billion compared to $1.66 Billion in 2015, in the number of recorded sales when compared to 2015. The which was a particularly strong year for retail investment sales in decline is in large part due to the lack of available supply as well Metro Vancouver. Due to the lack of available supply, the market as escalating home prices during the first half of 2016 causing recorded just 29 investment transactions between $5 million and public demand for government intervention. The announcement $10 million representing 14% of the total sales figure. The market of the 1% Vacant Homes Tax in the City of Vancouver which came saw 34 transactions above $10 million, representing 63% of the total into effect January 1st 2017 as well as the 15% Foreign Buyer’s sales figure. The most notable transaction for the year was the sale Tax introduced on August 2nd 2016 contributed to an easing of Royal City Centre in for $114.7 Million. 2017 has of upward pressure on the market. Demand remained strong started off strong with a $1.9 Billion sale by Cadillac Fairview to the for residential development in 2016 as the number of housing Ontario Pension Board and the Workplace Safety and Insurance starts across Metro Vancouver experienced a 34% increase when Board who purchased 25 percent each. The 50 percent sale of compared to 2015, according to CMHC data. assets in Vancouver including (which was recently The BC economy continues to show resilience despite national recorded as having Canada’s third highest retail sales per square and international economic uncertainty by adding over 69,000 foot) closes January 31st 2017. jobs to the province during 2016; the highest job growth in the country. Job growth is expected to increase throughout 2017 with the recent federal and provincial government approval of the Kinder Morgan Trans Mountain Pipeline Expansion creating job MACROECONOMIC FACTORS opportunities in Northern BC. also led Canada in retail sales throughout this past year with the latest reading taken BRITISH COLUMBIA Q4 2016 READ TREND in October 2016 amounting to $6.4 Billion; an 8.4% increase when compared to October 2015. The BC retail industry showed a few Unemployment Rate 5.5% Dec q key trends throughout 2016; chief among them being an increased Total Building Permits $12.434 Billion Dec p focus on omni-channel opportunities as well as pop-up stores for new retailers testing the waters of Vancouver’s retail market. While Retail Sales $6.4 Billion* Nov p both of these trends are expected to continue, the top trend for Consumer Price Index 122.7 Dec p Metro Vancouver retail in 2017 is an emphasis on international Net Population (2016) +0.28% Nov p retailers entering the Canadian – or Western Canadian- market for the first time. An example of this is Metro Vancouver welcoming *Seasonally adjusted the much anticipated Japan-based retailer Muji to the market in early 2017 and also expecting to welcome fellow Japanese fashion retailer later this year. Continuing this trend is the expansion CANADA Q4 2016 READ TREND of high-end international brands such as Sandro and Maje, Van Consumer Price Index 128.4 Dec p Cleef & Arpels, COS and Cartier. Total Building Permits $77.385 Billion Nov q Retail supply in Metro Vancouver increased with over 1,800,000 CAD/USD $0.753 Dec q square feet of retail space built out during 2016; in large part due to the opening of Mills in South Delta on October Prime Lending Rate 2.70% Dec  5th 2016. Even with this increase in retail supply, Metro Vancouver Overnight Rate 0.509% Dec  remains to have the lowest amount of square feet of shopping space per capita when compared to other major Canadian cities.

lee–associates.com Market Overview

THE CITY OF LOUGHEED BY SHAPE PROPERTIES GILMORE PLACE BY ONNI GROUP is a 40-acre master planned community centred around the Gilmore Place is a mixed-use master planned community development in current Lougheed Shopping Centre with redevelopment densification of 1.4 million SF located at the Gilmore SkyTrain Station with the first phase now of retail, 1 million SF of office space and on-site residential homes. underway.

CURRENTLY UNDER CONSTRUCTION AND POTENTIAL DEVELOPMENTS | LOWER MAINLAND

DEVELOPER PROJECT NAME MUNICIPALITY RETAIL SIZE NOTABLE TENANTS ESTIMATED COMPLETION

Shape Properties The Amazing Brentwood Burnaby 547,192 TBD Q2 2018

Onni Group Gilmore Place Burnaby 491,000 TBD TBD

McArthur Glen McArthur Glen Designer Outlet – Phase 2 Richmond 180,000 TBD Q3 2018

Cressey Kings Crossing Burnaby 138,102 TBD Q2 2018

Shape Properties The City of Lougheed – Phase 1 Burnaby 102,000 TBD Q1 2020

Onni Group Centreview 90,200 Whole Foods, Steve Nash Fitness World Q4 2017

Wesgroup River District – Phase 1 Vancouver 60,000 Save-On Foods, TD Bank Q4 2018

EXPANDING RETAILERS | CANADIAN MARKET RETRACTING RETAILERS | CANADIAN MARKET

TENANT TYPICAL SQ FT MARKET LOCATIONS* TENANT TYPICAL SQ FT MARKET STORES CLOSING

Costco 150,000 Canada 98+ Sears 130,000 Canada TBC

La Maison Simons 100,000 Canada 17+ Golf Town 18,000 Canada TBC Saks off Fifth 30,000 Canada 25+ American Apparel 3,000 Canada 30 stores* Nordstrom Rack 30,000 Canada 20+ Jacob 3,000 Canada 92 stores Dollarama 9,000 Canada 1,050+ Danier Leather 3,000 Canada 76 stores Urban Barn 8,000 Canada 70+ Pet Valu 3,800 Canada 700+ Le Château 3,000 Canada 14+ stores Tim Hortons 2,500 Canada 4000+ Smart Set 2,000 Canada 107 stores**

Rudsak 2,000 Canada 50+ Quiznos 800 Canada TBC GNC 1,000 Canada 200+ David’s Tea 700 Canada 250+ *All 110 international stores will be closing as of April 2017 *Canadian locations post-expansion **76 of 107 stores will be converted into other Reitmans Canada Limited operated stores

Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report | 3 Downtown Vancouver Market

DOWNTOWN CORE GASTOWN | RAILTOWN Vancouver’s Downtown core continued to experience a major Gastown has historically been a renowned submarket of Vancouver rejuvenation with the addition of several luxury retail tenants for trendy retailers to open unique concept stores; drawing in both in 2016. Vancouver will continue to see extensive revitalization locals and tourists alike. The Lee & Associates Fall 2016 report throughout 2017; one of the most notable being the redevelopment highlighted this rapidly evolving retail node as having relatively low of Pacific Centre’s existing plaza and dome located on the northeast lease rates when compared to other areas of Downtown Vancouver. corner of West Georgia and Howe Street which will add just under The end of 2016 however, proved that is no longer the case for 30,000 square feet of retail space to the centre. Another plaza Gastown. As the submarket evolved throughout the past year, retail redevelopment set to open this year is Kingswood Capital’s new lease rates continued to climb. International brands are recognizing retail building on Alberni Street which will be anchored by a 6,200 the unique retail landscape that Gastown has to offer, with 2017 square foot Van Cleef and Arpels flagship location. The high-end openings including notable brand Hershel, who are set to open Parisian jeweler will join notable tenants Prada, Stefano Ricci, Saint their first Canadian location spanning 5,000 square feet. Seattle- Laurent Paris and the expanded Tiffany & Co. which were recently based heritage brand Filson will be opening its first Canadian introduced to Vancouver’s ‘luxury zone’. location as well; a 1,500 square foot store at 47 Water Street. Water Street will also welcome H&M’s high-end brand COS in 2017, further Downtown Vancouver also welcomes a new location for the North fueling the influx of boutiques, up-scale restaurants, cafés, stylish Vancouver outdoor clothing brand Arc’teryx who will take over the art galleries and unique fashion retailers located in the area. 4,060 square foot formerly-occupied Le Chateau space on Burrard Street near Robson Street. The interior is currently undergoing YALETOWN renovations and the store will open later this year. A few stores down on Burrard, online retailer Shoes.com have opened their This submarket is home to some of the city’s best salons, brick-and-mortar location at 779 Burrard Street. restaurants and lounges. Proximity to high-density condo towers as well as the Canada Line SkyTrain Station at Davie and Mainland One of the most notable rezoning applications put forth during Streets drive demand in the area. Retrofit brick and beam former 2016 was by architectural firm Musson Cattell Mackey Partnership warehouse buildings now facilitate retail spaces and quality offices on behalf of landowners BC Investment Management Corporation above. New entrants to the Yaletown market include fashion and and developer Bentall Kennedy for the Canada Post building at 349 home décor retailer Kokko, who will take over 20,000 square feet West Georgia. The proposed redevelopment would include 274,000 on the first and second floor of one of the most notable buildings square feet of retail space, 512,000 square feet of office space, in Yaletown at 948–950 Homer Street. The building was previously 201,000 square feet of above-grade parking and over 700,000 occupied by long-standing tenant Chintz & Co., who vacated in square feet of condominium and market rental housing. Upon late 2016. The interior is currently undergoing renovations and completion, the complex would have close to 1.7 million square feet Kokko will open in early 2017. of floor space, one million of which would be new space built upon the 637,000 square foot conversion of the existing post office.

MARKET FORECAST INDICATORS RETAIL INVESTMENT SNAPSHOT METRO VANCOUVER METRO VANCOUVER

INDICATOR TREND 2015 2016 TREND Vacancy  q Net Absorption  Number Of Trades* 271 221

New Development p $1.665 $1.462 q Transaction Volume* (CAD) Billion Billion Rental Rates  *Number of trades and transaction volume are based on trades over $1 Million Cap Rates q

Source: Realnet, Lee & Associates Research

lee–associates.com Downtown Vancouver Market

DOWNTOWN VANCOUVER LEASE RATE MAP

Stanley Park

harbour green park

BURRARD INLET

portside park

Nelson oppenheimer Park park

Robson Square

ENGLISH BAY Sunset Beach

Andy Livingstone Park

Hadden Park Vanier Park

Creekside Park Coopers Park Thorton Park

George Wainborn Park David Lam Park

Robson between Thurlow and Hornby boast the highest net rents in Metro Vancouver. Darker regions indicate higher lease rates.

LEASE RATE TRENDS | DOWNTOWN VANCOUVER

MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM 2017* 2017* 2017* 2017*

Robson Street (Beatty Alberni Street p $130 – $160 $15 – $30 to Burrard) p $50 – $235 $20 – $45

Burrard Street (Georgia Robson Street (Bute to Davie)  $40 – $200 $15 – $40 to Denman) q $50 – $120 $20 – $40

Abbott Street (Expo Davie Street p $30 – $65 $15 – $20 to Hastings)  $30 – $50 $15 – $25

Denman  $40 – $75 $20 – $30 Gastown p $25 – $90 $15 – $25

Granville Street (Downtown) p $40 – $125 $15 – $30 Railtown p $15 – $25 $8 – $14

Hornby Street  $45 – $180 $20 – $50 Yaletown p $40 – $95 $20 – $30

Robson Street (Burrard to Bute)  $120 – $250 $50 – $65 West Georgia p $35 – $175 $20 – $35

*Estimated

Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report | 5 Vancouver Market

SOUTH GRANVILLE South Granville is a sophisticated shopping district where premier approximately 60,000 square feet of grocery anchored retail. brands have assembled outside of the Downtown Core. High-end Located along the Marine Drive corridor between Kerr Street to apparel and furniture retailers such as Pottery Barn, Restoration Boundary Road, the planned community will serve the growing Hardware, EQ3 and Anthropologie have established themselves population within the South Vancouver - Burnaby region and upon in this affluent shopping district. Joining these notable tenants full completion will feature 155,000 square feet of retail space. during 2016 was Structube, a home décor retailer specializing in contemporary and modern home furniture at 2401 Granville Street. NORTH SHORE There will continue to be activity in the market during 2017 as higher The North Shore boasts some of the highest household and rates are forcing some retailers to downsize or reconsider their disposable incomes in Metro Vancouver. Park Royal Shopping presence in this high-traffic central location. For example, HSBC has Centre dominates the retail landscape of , where followed suit of other chartered banks and have downsized from historic Quebec retail giant La Maison Simons has now opened a 6,000 square feet at 13th and Granville to 2,750 square feet at 15th 100,000 square foot high-end fashion store. Park Royal continues and Granville. The former HSBC space will be remodeled by landlord to renovate and is currently revamping the entire North Mall. Austeville Properties and possibly demised into three retail units. When completed in early 2017, the North side of Park Royal will have been de-malled and will feature a new 25,000 square foot KITSILANO (KITS) BC Government Liquor Store, a 30,500 square foot Steve Nash Within close proximity to The University of British Columbia, this area Platinum Fitness Club and a new 45,000 square foot Loblaw’s City is popular with students and lifestyle conscious residents who enjoy Market grocery store. Kitsilano for its organic food markets, fashion, eateries and close proximity to beaches along the south shore of English Bay. The year Along Marine Drive in North Vancouver, First Capital is finalizing a 2016 continued to add to Kitsilano’s repertoire of unique places to 9,000 square foot addition to Amadon Plaza and Norgate Plaza eat as it welcomed Mak n’ Ming, a Japanese-meets-French fusion has leased 4,500 square feet to Bosley’s by Pet Valu for an end cap restaurant at 1629 Yew Street, Hoke Poke at 1836 West 4th Avenue space in the former Rockford restaurant space. In Central Lonsdale, and Nook -the popular eatery at York and Yew Street- will expand with Onni Group’s Whole Foods anchored project Centerview at 13th another location in the former Smoking Dog space at 1st and Cypress and Lonsdale will complete construction by mid-2017 alongside Avenue. While buildings in Kitsilano are typically older in keeping co-tenants Steve Nash Fitness World and Shopper’s Drug Mart. The with its laidback style, this community welcomed Orr Development’s Lonsdale Corridor in North Vancouver also continues to experience mixed-use building “West Five” which will feature a brand new significant population growth and increased retail development. Vancouver flagship for Rolls Royce at West 5th and Burrard. Tap & Barrel opened a 14,000 square foot restaurant inside a 100 year old building on the Shipyards Site in 2016 and future additions to the waterfront area include the construction of “Lot 5”, a mixed SOUTH VANCOUVER use development purposed for restaurants, retail and a hotel. There Located on Marine Drive and Cambie Street, there is an emerging are also plans to build Metro Vancouver’s largest outdoor skating sub-market in South Vancouver. The city’s top developers including rink, a water park and a concert stage. Onni, Intracorp, PCI and Concord Pacific have invested heavily in creating a contemporary neighborhood with over 1,700 residential Polygon Homes is currently in the preconstruction stage at 118 Carrie units, 400,000 square feet of office space and 500,000 square feet Cates Court for a mixed-use development featuring 117 residential of retail. The most notable development to date has been PCI’s Marine units and over 10,000 square feet of retail on the ground level Gateway connected to the Canada Line Station. This mixed use which will be completed in early 2019. Also in the preconstruction office/retail/residential development opened in the Spring of 2016. stage is Concert Properties’ $400 Million Harbourside Waterfront The retail component is grocery anchored and co-tenants include development along Harbourside Drive at the foot of Fell Avenue. Shopper’s Drug Mart, Winners, Cineplex Odeon, Steve Nash Fitness Upon completion in the next ten to fifteen years, the development World and CIBC. Further east at the northwest corner of Fraser and will house roughly 800 residential units as well as 300,000 square Southeast Marine Drive the Super 8 Hotel site is slated for a mixed- feet of commercial space. Further redevelopment at Lonsdale use redevelopment with upwards of 15,000 square feet of new retail. Quay includes the Seabus Terminal which is slated for a $12.5 million dollar renovation to be complete by 2018. The most significant new retail development underway will be Phase 1 of Wesgroup’s 130-acre River District which will feature

lee–associates.com Vancouver Market

VANCOUVER LEASE RATE MAP

DENMAN

ENGLISH POWELL STREET E HASTINGS ST BAY CHINATOWN

Vanier

Park PRIOR ST CLARK DR CLARK

POIN T G TERMINAL AVENUE

REY RD CORNWALL AVE COMMERCIAL DR COMMERCIAL W 4TH AVE FALSE CREEK

ALMA ST W BROADWAY BURRARD ST W BROADWAY

CAMBIE ST CAMBIE E BROADWAY W 12TH AVE

GRANVILLE ST E 12TH AVE

W 16TH AVE

KINGSWAY MAIN ST MAIN

ARBUTUS ST

MACDONALD ST KING EDWARD AVE

FRASER ST FRASER KNIGHT ST KNIGHT

OAK ST

BLENHEIM ST

DUNBAR ST Queen W 33RD AVE Elizabeth E 33RD AVE Park DR VICTORIA

KERRISDALE

W 41ST AVE E 41ST AVE

ARBUTUS ST

Darker regions indicates higher lease rates.

W. BLVD LEASE RATE TRENDS | VANCOUVER MARKET

MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM 2017* 2017* 2017* 2017*

Commercial Drive (Venables to 13th Ave) p $30 – $45 $10 – $15 Chinatown p $18 – $35 $10 – $15

South Granville West 4th Avenue (5th Ave to 16th Ave)  $30 – $90 $20 – $35 (Burrard to Alma)  $30 – $70 $15 – $25

West Broadway Kingsway  $15 – $35 $10 – $15 (Main to Granville) p $30 – $65 $10 – $20

Main Street West Broadway (Hastings to 28th Ave) p $20 – $50 $10 – $15 (Granville to Alma)  $30 – $55 $15 – $20

Cambie Street (2nd Ave to 19th Ave) p $30 – $75 $15 – $30 East Hastings Street p $20 – $40 $10 – $15

Fraser Street Burrard Street p $35 – $55 $15 – $20 (Kingsway to King Edward) p $25 - $35 $10 - $15

Dunbar Street p $30 – $50 $15 – $20 Kerrisdale p $30 – $55 $15 – $20

East Broadway p $25 – $35 $10 – $15 Victoria Drive p $20 – $35 $8 – $15

*Estimated

Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report | 7 Metro Vancouver Markets

SUBURBAN MARKETS OVERVIEW

The suburban markets have seen significant retail and residential growth over the past year, most notably

Lynn imo a Cypress CAPILANO Tsawwassen and Burnaby. With the exception of high demand lease opportunities in close proximity to rapid an Headwaters N LAKE o Provincial Park T Regional Park LAKE Mount Seymour Indian Arm transit stations or major arterials, the overall tone of retail leasing activity in the suburban markets has retailers BC Ferries Terminal WEST NORTH Provincial Park Provincial Horseshoe Bay Park VANCOUVER VANCOUVER Pinecone 42,694 84,412 Burke cautiously evaluating new opportunities. BUNTZEN PIT LAKE LAKE Mountain M Golden Ears R Provincial Provincial A Lynn N Park Park Lynn Canyon IA ANMORE Valley D BELCARRA N 1,496 C Park Deep I 716 H Lighthouse E Cove H Park CITY OF A L NORTH VANCOUVER I S BURNABY | NEW WESTMINSTER 48,136 R I V Belcarra ER Regional ALOUETTE Shape Properties continues their redevelopment plans for North Burnaby’s Brentwood Mall and are now also Stanley BURRARD INLET Park PORT LAKE Park MOODY STAVE Capitol Coquitlam LAKE ENGLISH Westridge Hill 32,975 Centre focused on the redevelopment of the Lougheed Town Centre Mall. “The City of Lougheed” will be one of Canada’s BAY Simon Fraser University West Point Grey Burnaby PORT KENT largest new master-planned communities spanning 40 acres in size. Tower One of the first neighbourhood is now Mountain Park COQUITLAM K University of Dunbar Mundy E Burquitlam Austin Heights Rolley Lake E

British Columbia R British Columbia Park 55,958 Provincial Park Burnaby Lake C VANCOUVER Institute of COQUITLAM in the preconstruction stage and will include 566 residential units. Upon completion, the entire community will Pacific Spirit Collingwood Technology Regional Park H Regional Park 603,502 Queen IS Harrison Mills 126,456 Mary R Elizabeth Deer Lake R Oakridge Park BURNABY Hill O Park Maillardville MAPLE RIDGE N Colony Farm PITT include 1500 homes, two SkyTrain lines directly on site and over 300 new shops and restaurants. Kerrisdale 223,220 Edmonds Regional Park 76,052 MEADOWS Yennadon Metrotown Sapperton Haney Central Park Fraser Islands FRASER RIVER FRASER RIVER Regional ParkDouglas 17,736 Stave Falls Marpole Fraserview Res. Island NEW Lake Errock Pitt Meadows Vancouver WESTMINSTER Whalley Steelhead International 65,976 Fraser Surrey Airport On Burnaby’s western boundary, Onni is in the preconstruction stage for phase one of their Gilmore Place Heights Airport Bend Regional Park Guildford Barnston Sea Derby Reach development at Gilmore Avenue and Lougheed Highway, next to the Gilmore SkyTrain Station. Comprised Island Regional Park MISSION Rosedale Island South Westminster Green Timbers Tynehead Albion Ruskin 31,272 S Regional Park Queensborough Urban Forest Whonnock T Park Dewdney of over 12 acres of land, Onni anticipates 500,000 square feet of newly constructed retail space in addition Annacis R Island Anniedale Walnut A Grove Bear Creek Fort I RICHMOND Park LOUGHEED HIGHWAY to a large quantity of residential apartments on site. Over in South Burnaby/Edmonds, Ledingham McAllister G Port Langley Kells H 190,470 West Heights North Delta Glen Valley Hatzic Tilbury T Island Nature Reserve Forest Knolls Mission City has formally submitted an application for their four-phase master-planned community entitled “Southgate O SURREY F Steveston 468,251 Newton Cloverdale Sardis G Greendale City”. The 52-acre site will feature up to twenty residential towers and 200,000 square feet of commercial Deas Island Sullivan Milner E Regional Park DELTA Water Shed O Sumas Park Surrey 100,571 Mountain R Centre Regional CHILLIWACK space as it evolves over the coming years. Already under construction is Cressey’s ‘Kings Crossing’ mixed-use G Langley Matsqui Park Panorama Sumas 77,936 I Airport Murrayville Vedder A Ridge Mountain Crossing Ladner Bradner Regional Hoppington Park development site at Kingsway and Edmonds featuring three residential towers and 70,000 square feet of retail Westham Island Clayburn Brookswood Boundary Bay Yarrow space scheduled for completion in 2019. Airport MUD BAY CHI ABBOTSFORD LL IW R A VE Aldergrove 133,497 C K RI CULTUS LAKE Sunny Side Acres BOUNDARY BAY Aberdeen New Westminster continues to see strong multifamily residential growth and with it, increased demand from Urban Clearbrooke Beach Forest Sunny Side LANGLEY Grove 104,177 Cultus Lake North consumers. Anchored by Royal City Centre, Uptown (Sixth Street & Sixth Avenue) continues to be the most Abbotsford Provincial Park Poplar Boundary Bay WHITE ROCK Campbell Valley Airport Regional Park Regional Park BC Ferries Terminal T 19,339 Aldergrove o N Tswawwassen Tsawwassen desirable area for retailers. In lower New Westminster, revitalization continues as Bosa Development purchased an Lake Huntingdon aim Douglas o Regional Park To Victoria CANADA CANADA the 1.6 hectare plot at 660 Quayside Drive (between Westminster Pier Park and the Fraser River Discovery U.S.A. U.S.A. Centre) from Larco in early 2016 and are going forth with a multi-tower residential and commercial project on the undeveloped waterfront site. The project is currently in the preconstruction stage and upon completion will consist of either two or three residential towers and will also include a stand-alone building for a restaurant and a daycare facility.

RICHMOND

Richmond is continuing to experience extensive residential development, particularly in the Oval Neighbourhood (North West Richmond) and along No. 3 Road with urban villages clustering around the Canada Line transit stations. The No. 3 Road corridor is transforming from a long stretch of strip malls into a growing parade of high-rise residential and commercial buildings. Lease rates along the transit route have seen sharp increases with the demolition of older existing retail and the development of mixed use projects. The Oval Neighbourhood, bordered by No. 3 Road, Westminster Highway, the Fraser River and No. 2 Road has experienced extensive residential high-rise development. When fully built-out the area will total approximately 15,600 residential units and house 35,500 residents with a mix of office and retail. Last year saw the completion of Onni’s mixed-use development featuring T&T Supermarket. Cressey’s Cadence project at Lansdowne Road and Gilbert Road anchored by Steve Nash Fitness World and Shoppers Drug Mart is slated for completion later this year.

The newest arrival to the retail scene in Richmond during 2016 was the grand opening of Smart Centre’s “Central at Garden City” comprising 359,090 square feet of retail anchored by Walmart at Alderbridge Way and Garden City Road. Co-tenants include Marshall’s, Discount Shoe Warehouse, Bed Bath & Beyond and Bosley’s by Pet Valu.

lee–associates.com Metro Vancouver Markets

METRO VANCOUVER POPULATION MAP

Lynn o aim Cypress an CAPILANO Headwaters N LAKE o Provincial Park T Regional Park COQUITLAM LAKE Mount Seymour Indian Arm BC Ferries Terminal WEST NORTH Provincial Park Provincial Horseshoe Bay Park VANCOUVER VANCOUVER Pinecone 42,694 84,412 Burke BUNTZEN PIT LAKE LAKE Mountain M Golden Ears R Provincial Provincial A Lynn N Park Park Lynn Canyon IA ANMORE Valley D BELCARRA N 1,496 C Park Deep I 716 H Lighthouse E Cove H Park CITY OF A L NORTH VANCOUVER I S

48,136 R I V Belcarra ER Regional ALOUETTE Stanley BURRARD INLET Park PORT LAKE Park MOODY STAVE Capitol Coquitlam LAKE ENGLISH Westridge Hill 32,975 Centre BAY Simon Fraser University West Point Grey Burnaby KENT Mountain PORT

Park COQUITLAM K University of Dunbar Mundy E Burquitlam Austin Heights Rolley Lake E

British Columbia R British Columbia Park 55,958 Provincial Park Burnaby Lake C VANCOUVER Institute of COQUITLAM Pacific Spirit Collingwood Technology Regional Park H Regional Park 603,502 Queen IS Harrison Mills 126,456 Mary R Elizabeth Deer Lake R Oakridge Park BURNABY Hill O Park Maillardville MAPLE RIDGE N Colony Farm PITT Kerrisdale 223,220 Edmonds Regional Park 76,052 MEADOWS Yennadon Metrotown Sapperton Haney Central Park Fraser Islands FRASER RIVER FRASER RIVER Regional ParkDouglas 17,736 Stave Falls Marpole Fraserview Res. Island NEW Lake Errock Pitt Meadows Vancouver WESTMINSTER Whalley Steelhead International 65,976 Fraser Surrey Airport Heights Airport Bend Regional Park Guildford Barnston Sea Derby Reach Island Regional Park MISSION Rosedale Island South Westminster Green Timbers Tynehead Albion Ruskin 31,272 S Regional Park Queensborough Urban Forest Whonnock T Park Dewdney Annacis R Island Anniedale Walnut A Grove Bear Creek Fort I RICHMOND Park LOUGHEED HIGHWAY G Port Langley Kells H 190,470 West Heights North Delta Glen Valley Hatzic Tilbury T Island Nature Reserve Forest Knolls Mission City O SURREY F Steveston 468,251 Newton Cloverdale Sardis G Greendale Deas Island Sullivan Milner E Regional Park DELTA Water Shed O Sumas Park Surrey 100,571 Mountain R Centre Regional CHILLIWACK G Langley Matsqui Park Panorama Sumas 77,936 I Airport Murrayville Vedder A Ridge Mountain Crossing Ladner Bradner Regional Hoppington Park Westham Island Clayburn Brookswood Boundary Bay Yarrow Airport MUD BAY CHI ABBOTSFORD LL IW R A VE Aldergrove 133,497 C K RI CULTUS LAKE Sunny Side Acres BOUNDARY BAY Aberdeen Urban Clearbrooke Beach Forest Sunny Side LANGLEY Grove 104,177 Cultus Lake North Abbotsford Provincial Park Poplar Boundary Bay WHITE ROCK Campbell Valley Airport Regional Park Regional Park BC Ferries Terminal T 19,339 Aldergrove o N Tswawwassen Tsawwassen an Lake Huntingdon aim Douglas o Regional Park To Victoria CANADA CANADA U.S.A. U.S.A.

METRO VANCOUVER DEMOGRAPHICS

MUNICIPALITY POPULATION* MED. AGE* AVG. INCOME** MUNICIPALITY POPULATION* MED. AGE* AVG. INCOME**

Vancouver 636,534 38.9 $88,663 Coquitlam 136,202 39.8 $87,995

West Vancouver 44,508 50.2 $196,433 Port Moody 36,579 38.0 $104,521

City of North Vancouver 51,267 40.5 $79,815 Port Coquitlam 59,972 38.7 $98,424

District of North Vancouver 88,303 43.2 $126,445 Pitt Meadows 19,298 39.0 $93,172

Burnaby 240,171 39.0 $79,424 Mission 38,727 38.5 $81,765

New Westminster 71,594 40.7 $79,499 Maple Ridge 81,888 39.9 $96,230

Richmond 204,327 41.5 $81,899 City of Langley 26,635 39.8 $65,640

Delta 104,911 42.6 $101,059 Township of Langley 112,496 40.0 $110,579

Tsawwassen 739 50.2 $142,066 Abbotsford 142,881 37.0 $84,904

White Rock 20,300 54.0 $82,685 Chilliwack 84,872 39.0 $79,860

Surrey 517,417 37.1 $96,557

*PCensus 2013 Estimate **Average Household Income, 2013 Estimate

Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report | 9 Suburban Vancouver Market

PORT MOODY | COQUITLAM | PORT COQUITLAM Metro Vancouver’s North East sector showed rapid growth in anticipation of the now-open Evergreen Rapid Transit Line. As a result, all of the nearby communities are benefitting including Port Moody with even more high-rises in the town centre. continues to thrive along with neighbouring strip centres. The Westwood Mall anchored by the Real Canadian Superstore is underway with renovations which also feature the introduction of a new 8,000 square foot UFC Gym (the first in Metro Vancouver) alongside their sister club Steve Nash Fitness World which renewed and renovated.

In Port Coquitlam, construction is almost complete for the new retail development at Maryhill Bypass and Broadway. The development 3 CIVIC PLAZA BY CENTURY GROUP includes three buildings totaling 13,500 square feet. Starbucks This will be Surrey’s tallest building at fifty-two storeys and will feature 349 recently opened their drive thru location at the site; Subway and residential condos above a Marriot hotel. A&W will both open in early 2017.

In Port Moody, the owners of the Flavelle mill waterfront property — Flavelle Oceanfront Development — have again formally submitted In South Surrey, Grandview Central Shopping Centre is in the final an application to amend the Official Community Plan. The stages of construction and is anchored by the recently opened Real much-anticipated plan for a high-density mixed-use development Canadian Superstore as well as Goodlife Fitness and Shopper’s requires the Board of Metro Vancouver to remove the property’s Drug Mart. Co-tenants will include Dollarama, Party City, BCAA industrial use zoning to allow for the 3,000 plus residential units and Brown’s Social House. These retailers will join a market of planned. The developer also plans for the site to have 99,000 over 1,000,000 square feet of existing retail within a one kilometer square feet of office space, 72,000 square feet of retail and over radius of the southeast corner of 24th Avenue and 160th Street. 100,000 square feet of light industrial space upon completion. In White Rock, various developments will be under way in 2017 after gaining approval in 2016. Bosa Properties will begin sales later SURREY this year on the second phase of Miramar Village and Landmark With over 1,000 new residents welcomed every month, Surrey Premiere Properties acquired a 2.5 acre site upon which they are continues to be one of the fastest growing markets in Canada and constructing three residential towers with retail and office space. experienced the highest level of construction activity in its history The development, entitled “Foster Martine” will feature over 330 during 2016. Surrey Central City is currently transitioning into a residential units. The renovation of Semiahmoo Mall is gaining densely populated commercial node with numerous mixed-use momentum as First Capital re-merchandises around the former projects slated for construction over the next 5 to 10 years. One of Zeller’s at 16th Avenue and 152nd Street. the most notable projects is Century Group’s “3 Civic Plaza” which is in the Civic Square of Surrey adjacent to City Hall and City Library. DELTA | LADNER | TSAWWASSEN This will be Surrey’s tallest building at fifty-two storeys and will feature 349 residential condos above a 144-room Marriot hotel complete with Two of the larger retail projects recently completed in Metro a ballroom, six meeting rooms, five storeys of office space; three of Vancouver are and Tsawwassen Commons; which which will be a 30,000 square foot Kwantlen Polytechnic University were developed in tandem by Ivanhoe Cambridge, The Property campus as well as ground floor retail which will house Prado Café. Development Group and Tsawwassen First Nations. The projects are situated at the intersection of Highway 17 and 52nd Street and Concord Pacific’s Park Avenue West project is currently under added 1,710,000 square feet of retail space upon its opening on construction and will be completed in Q2 2017. PCI’s King George October 5th 2016. A 145,000 square foot wilderness themed retail Station Phase 2 is getting traction and proposes a mixed-use giant Bass Pro Shop anchors the Mill site and while not officially development which will include approximately 350,000 square feet complete; Walmart, Canadian Tire, Tim Hortons, and PetSmart will of retail space and 450,000 square feet of class ‘A’ office space. anchor the large format centre Tsawwassen Commons next door. Phase I is now complete and is anchored by Coast Capital Savings’ new head office with over 700 employees. Additional phases of the Across from Tsawwassen Mills a new boutique hotel will be built development may include 1,200,000 square feet of residential space. by Executive Hotels & Resorts who also purchased Tsawwassen’s

lee–associates.com Notable Transactions

Splashdown Park this past year. The water park was previously said to Sportcheck spaces will be demolished for the expansion to occur. be closed for good but is now undergoing extensive renovations and Both tenants will be relocated to the opposite side of the mall in a will be reopened as “Big Splash Waterpark”. The park will introduce new new corridor adjacent to Sears. slides to the kids section but will also include a “Vegas-style” adults only section equipped with cabanas, a DJ booth and a VIP viewing deck. ABBOTSFORD Abbotsford’s most notable new retail development is Matsqui LANGLEY Development’s McCallum Junction project located on the north Langley is made up of several shopping districts with Willowbrook east corner of Hwy 1 and McCallum Road. The 130,000 square foot remaining the largest at 200th Street and the Langley Bypass. development is anchored by outdoor recreation merchandiser Activity in Willowbrook includes renovations to Wesgroup’s Cabela’s, who opened their 70,000 square foot location in June 2016. Langley City Square which will feature new contemporary building facades, upgraded building systems, improved access and parking. On Abbotsford’s western boundary, Forever 21’s sister brand F21 RED opened its first Western Canadian store in January 2017. The Meanwhile, Willowbrook Mall will be revamped in 2017 to include a 15,000 square foot store will compliment Highstreet Shopping new 140,000 square foot outdoor mall expansion which will include Centre’s 600,000 square foot open-air plaza at Mount Lehman more retail space, restaurants and places for shopper’s to relax Road and Hwy 1 anchored by Walmart, , H&M, Steve with a village feel similar to Park Royal. The current Toys R Us and Nash Fitness World, Milestone’s and Cineplex VIP Cinema.

NOTABLE RETAIL SALE TRANSACTIONS | 2016

PROPERTY ADDRESS | NAME MUNICIPALITY PRICE SIZE (SF) PRICE/SF PURCHASER(S) Royal City Centre New Westminster $114,700,000 361,386 $317 Dava Developments Ltd.

Peninsula Village Shopping Centre Surrey $78,250,000 170,706 $458 First Capital Realty Inc

Mission Junction Mission $68,050,000 282,533 $241 LaSalle Investment Management

1818-1862 West Broadway Vancouver $56,250,000 37,500 $1,500 1077003 B.C. Ltd – Canadian Private Investor

950 West Broadway Vancouver $46,000,000 25,000 $1,840 Hometop Enterprises Ltd.

The Wilson Block Vancouver $38,250,000 75,155 $509 Bonnis Properties Ltd.

Central Plaza Shopping Centre White Rock $29,000,000 50,000 (est) $580 Landmark Premiere Properties Ltd.

1060 Homer Street* Vancouver $26,000,000 41,863 $621 Transworld Management Ltd.

*Estimated

NOTABLE RETAIL LEASE TRANSACTIONS | 2016

PROPERTY ADDRESS | NAME MUNICIPALITY TENANT SIZE (SF)

Park Royal * West Vancouver Steve Nash Fitness World 28,740

948-950 Homer Street* Vancouver Kokko 21,500

1308 Lonsdale Avenue* North Vancouver Steve Nash Fitness World 21,000

34150 South Fraser Way* Abbotsford Get Air 18,000

728 Granville Street Vancouver Tom Lee 14,000

475 West Georgia Vancouver Canada Post 8,000

1606 West Broadway Vancouver Kohler 5,000

1819 West 5th Avenue Vancouver Rolls Royce 4,125

813 Burrard Street Vancouver Arc’teryx 4,100

5698 Victoria Drive Vancouver Tim Hortons 2,851

6231 Fraser Street* Vancouver Indochine Kitchen + Bar 2,263

*Brokered by Lee & Associates

Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report | 11 Retail 2017 Report

Vancouver Retail team

Neil S McAllister Personal Real Estate Corporation Senior Vice President 604 630 3374 [email protected]

Sean Ogilvie Vice President 604 630 3402 email: [email protected]

Howard Malchy Personal Real Estate Corporation Vice President 604 895 2226 [email protected]

Andrea Fletcher Senior Associate 604 630 3398 [email protected]

Russell Long, BA, DULE Associate 604 630 3059 [email protected]

For inquiries please contact

Hayley Adams Research Associate, Retail 604 630 3059 [email protected]

Lee & Associates Vancouver 475 West Georgia Street, Suite 800 Vancouver, BC V6B 4M9 tel 604 684 7117 | fax 604 684 1017

This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, Lee & Associates can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to Lee & Associates.

© 2017 Lee & Associates Commercial Real Estate (BC) Ltd.