MARKETBEAT EDMONTON, AB Retail Q4 2020 YoY 12-Mo. ECONOMY Chg Forecast After a difficult year, moderate GDP growth is expected in Edmonton of approximately 4.0% in 2021 (Source: City of Edmonton Fall 2020 Forecast Update). The COVID-19 pandemic, tighter public health measures, and volatile oil prices will continue to weigh on the local economy $83,769 and cause a slowdown in economic recovery. Seasonally adjusted unemployment in the Edmonton CMA decreased by 20 basis points month- Median HH Income over-month to 11.1% in December 2020. Edmonton’s year-to-date (YTD) 2020 non-residential construction permits as of November 2020 declined by 15.2% year-over-year (YOY) with industrial, commercial, and institutional decreasing by 21.5%, 13.1%, and 17.9%, respectively. 1.9% 2020F Population Growth DEMAND Many retailers are facing difficulties as a result of the COVID-19 pandemic, which has forced many businesses to close permanently. However, a surge of new entrepreneurs have emerged during the pandemic, while other retailers continue to thrive and expand their presence in the city. 11.1% Following the closure of Holt Renfrew in January 2020, a trend of high-end retailers have opted to open stand-alone stores in West Edmonton Unemployment Rate Mall (WEM). Aside from Louis Vuitton’s move from Downtown Edmonton to WEM in 2019, Saint Laurent opened a new 2,900-square foot (sf) Sources: Statistics Canada, Sitewise, City of Edmonton location in November 2020, and Gucci is expected to open a 5,000-sf store in March 2021. Other retailers new to WEM include LEGO’s new 6,500-sf flagship store and a 5,200-sf Reitman’s location. EDMONTON ECONOMIC INDICATORS Retail sales in Edmonton for October 2020 increased by 2.3% month-over-month and by 8.9% YOY. However, the YTD retail sales total as of Q4 2020 October 2020 is still lower than pre-pandemic levels, 3.2% lower than in 2019. The decrease is mostly attributed to a drop in sales at motor vehicle and parts dealers (-12.8%), and clothing and clothing accessories stores (-29.5%). However, there were industries that posted gains this YoY 12-Mo. year including building materials and garden equipment and supplies dealers (+9.7%) and food and beverage stores (+10.8%). Chg Forecast -6.4% OUTLOOK GDP Growth The province of Alberta started its vaccination program in late-December 2020, providing some cautious optimism for many businesses to 2020F gradually reopen at normal operations, and for consumer confidence to start to recover in 2021. Thus, brick-and-mortar stores will continue to co- exist with e-commerce post-COVID-19 as more people become comfortable and feel safe with in-store shopping. For the time being, the COVID- 19 pandemic will continue to weigh on the retail industry as public health measures are still in place. Subsequently, vacancy is expected to $2.5B continue to rise while rental rates are expected to decline. With grocer-anchored centres being the exception, new retail developments may slow Retail Sales down in the next couple of years, although many businesses are looking to redevelop their properties to adapt to the new retail landscape. Some October 2020 redevelopment projects include Holt Renfrew’s old location at Manulife Place in downtown to be redeveloped into a retail podium, Jasper Gates Shopping Centre into a high-density mixed-use development, and to redevelop the former Sears space at Southgate Centre. 2.3% MoM Retail Sales Growth MONTHLY CANADIAN RETAIL SALES, UNADJUSTED PERSONAL DISPOSABLE INCOME GROWTH October 2020 9.0% 10% $80,000 12% 5.5% 5.2% Sources: Statistics Canada, City of Edmonton Fall 2020 10% $60,000 5% Forecast Update 8% 0.5% -0.2% 0.6% -1.3% $40,000 6% 0% 4% Millions $20,000 2% -5% $0 0% -10% Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 -9.9% -10.5% -15% 2015 2016 2017 2018 2019 2020F 2021F 2022F 2023F Retail Sales E-commerce's share of total Retail Sales Sources: Statistics Canada, Oxford Analytics MARKETBEAT EDMONTON, AB Retail Q4 2020 KEY PROPERTIES UNDER CONSTRUCTION PROPERTY SUBMARKET MAJOR TENANTS SF PROPERTY TYPE Currents of Windermere Southwest 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 Harvest Pointe Shopping Centre Southeast Walmart, Sobeys 375,000 Regional Centre Heritage Valley Shopping Centre Southwest Superstore, Shoppers 303,472 Regional Centre Ice District Central Loblaws City Market, Rexall 208,000 Entertainment District Costco – Stony Plain Rd NW and 186 St NW Northwest Costco 127,000 Big-Box Store Windermere South Southwest Superstore 120,000 Regional Centre The Shopppes of Jagare Ridge Southwest Save-On-Foods, RBC, Shell, TD, Subway 119,650 Community Centre Grove on 17 Southeast Landmark Cinemas, Jiffy Lube, Wendy’s 107,000 Regional Centre Harvest Hills Southeast Superstore 97,000 Big-Box Store Ambleside Centre Southwest Ambleside Medical Inc., Cannabis House 92,000 Community Centre KEY LEASE TRANSACTIONS Q4 2020 RETAIL TEAM PROPERTY SUBMARKET TENANT SF TYPE +1 780 420 1177 [email protected] Broadmoor Landing Sherwood Park Habitat for Humanity 20,000 Headlease cwedm.com West Edmonton Mall West End LEGO 6,500 Headlease Yamaha instruments and music school West Point Centre North West End 6,073 Headlease operating as Amadeus Music 800 Broadmoor Boulevard Sherwood Park Sherlock Holmes Pub 5,600 Headlease A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION West Edmonton Mall West End Reitmans 5,200 Headlease Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real West Edmonton Mall West End GUCCI 5,000 Headlease estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 KEY SALES TRANSACTIONS Q4 2020 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, PROPERTY SUBMARKET SELLER / BUYER SF PRICE / $ PSF leasing, capital markets, valuation and other services. To Lehndorff Land General Partner Inc. / learn more, visit www.cushmanwakefield.com or follow Tamarack Southeast Southeast 95,895 $37M / $386 1369030 Alberta Ltd. @CushWake on Twitter. Lehndorff Land General Partner Inc. / Tamarack North Southeast 22,821 $11M / $480 Grove on 17 Retail Corp ©2021 Cushman & Wakefield. All rights reserved. The information Gold Bar Properties Ltd./ contained within this report is gathered from multiple sources believed 12621 Victoria Trail Northeast 5,633 $3.6M / $634 to be reliable. The information may contain errors or omissions and is 2292218 Alberta Ltd. presented without any warranty or representations as to its accuracy. 229326 Alberta Ltd. / Gainer Block Whyte Avenue 4,065 $1.4M / $341 Lead on Investments Ltd..