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Victoria Retail Market Report

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Victoria Retail Market Report Victoria Retail Market Report Q4 2019 Net Absorption – Shopping Centre MARKET OUTLOOK 2019 Year-over-Year Growing Suburban Retail Demand % 282K SF 261 The Greater Victoria Retail market segment such as food stores, pharmacy and restaurant maintained positive momentum throughout are not impacted by e-commerce. Large 5-Year Annual Average 10-Year Annual Average 2019. Vacancy rates for both street front and format discount retailers such as Costco and shopping centres declined this year. Walmart continue to experience strong sales in the region. As a result, Walmart has Downtown street front vacancy decreased 27K 61K committed to an additional location at the from 4.1% in 2018 to 3.1% in 2019. The former Sears, at Hillside shopping Centre for decrease in vacancy is driven by a variety of 2021. factors such as an increasing population, Downtown Street Front Vacancy strong tourism, and overall economic strength Greater Victoria continues to be a market of in the region. New street front tenants in the interest for investors and REITs with Q4 2019 Year-over-Year downtown core include Arc’Teryx, Dollarama, investment sales of the retail sector totaling % % Freshii and Perverted Ice Cream. over 15% of total annual sales. Significant 3.1 1.0 2019 sales included the sale of Tillicum Shopping centre vacancy decreased from Shopping Centre and First Capital Realty’s 7.0% in 2018 to 5.0% in 2019. Convenience, Shopping Centre Vacancy Langford Shopping Centre portfolio. neighbourhood, and community shopping Q4 2019 Year-over-Year centres continue to outperform regional In the downtown core, new office and multi- shopping centres. This is a continuation of a family developments continue to provide 5.0% 2.0% trend driven by e-commerce impacting upgraded retail options as well as an ongoing traditional interior mall retailer sales volumes. expansion of the traditional retail core. New As a result, tenant demand for interior mall developments continue to rise which are locations has declined. However, consumer consistently offering ground floor retail space. Development spending remains fairly stable given Victoria’s A recent development by Jawl Properties at economic conditions. New supply added to the 1515 Douglas Street is a prime example of Under Construction In Planning market in 2019 includes Belmont Shopping attractive retail space added to the downtown Centre, a landmark development by Crombie core. SF SF Reit in Langford. Major tenants include Thrifty 151K 398K Strong economic fundamentals for 2020 are Foods, Anytime Fitness, and Scotiabank. predicted to drive demand for both downtown New Supply Concerns among national retailers are the and shopping centre locations. The result will ongoing threat that e-commerce poses on the be increasing rental rates for the most 164K SF traditional retailers. However, e-commerce desirable locations. does not impact all retailers equally. Generally, Source: Citified retailers in neighborhood shopping centres Accelerating success. collierscanada.com/research Greater Victoria Overview Retail Market Leases By Segment Street Front & Shopping Centre Vacancy Comparison 01 2019 02 2010 – 2019 10% Consumer Durables 49% 8% 6% Other 27% 4% Vacancy Rate% Food & Beverages 17% 2% 0% Clothing & Textiles 7% Downtown Vacancy Shopping Centre Vacancy Shopping Centre - New Supply Downtown Vacancy Comparison 03 2019 04 Q4 2018 – Q4 2019 3,942 SF Victoria Victoria Victoria 2018 2019 2020* VACANCY Victoria NET ABSORPTION NEW SUPPLY Langford RENTAL RATE 160,000 SF *Projected Historical Overview – Shopping Centre Vacancy Rate Net Absorption New Supply 05 2010-2019 8% 300,000 7% 200,000 6% 100,000 5% 4% 0 % Vacancy 3% Absorption SupplyAbsorption (SF) & New -100,000 2% -200,000 1% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Colliers Canada | Victoria Retail Market Report | Q4 2019 collierscanada.com/research P.2 Greater Victoria Market Statistics and Profile Transactions Market Comparison Year End 2019 Net Net Total Total Vacant Vacancy Rate Vacancy Rate Net New Centres # Absorption Absorption Inventory (SF) (Q4'19) (Q4'18) Supply 2019 (SF) 2018 (SF) Shopping Centre Vacancy By Region Victoria 18 2,106,339 114,283 5.94% 6.62% 153,152 -159,151 3,942 Saanich 25 2,328,344 120,799 3.75% 4.77% 21,836 -40,496 0 Central Saanich 6 149,657 1,500 1.23% 2.01% 950 400 0 Langford 8 1,009,406 48,861 5.88% 1.55% 135,948 2,771 160,000 View Royal 5 327,152 12,958 5.45% 1.37% -5,400 5,582 0 Colwood 3 94,533 13,890 11.17% 0.00% -13,890 8,853 0 Esquimalt 2 65,415 795 2.10% 6.13% 1,527 -2,322 0 Oak Bay 3 45,439 2,489 3.00% 0.00% -2,489 0 0 Sidney 6 167,255 7,579 5.48% 0.24% -6,979 2,250 0 Sooke 3 124,424 3,000 1.37% 0.00% -3,000 0 0 North Saanich 1 86,000 0 0.00% 0.00% 0 86,000 0 Shopping Centre Vacancy By Type Regional 7 2,819,632 187,115 6.92% 9.08% 290,552 -173,040 163,942 Community 5 1,111,409 45,357 4.28% 4.71% 45,357 -15,901 0 Neighbourhood 37 2,015,697 65,879 4.55% 2.69% -13,445 13,037 0 Convenience 31 557,226 27,803 4.48% 3.13% -8,059 221 0 Market Totals 80 6,503,964 326,154 5.01% 7.00% 281,655 -96,113 163,942 Notable Sale & Lease Transactions Type Project Name Address Submarket Company Size Price Lease Hillside Mall 1644 Hillside Ave Saanich Walmart 148,803 SF Confidential Lease Belmont Market 3011 Merchant Way Langford Thrifty Foods 53,000 SF Confidential Lease Rohani Building 747 Fort Street Downtown Russell Books 17,776 SF Confidential Lease Island Home Centre 800 Tolmie Avenue Saanich Fit4Less 17,430 SF Confidential Lease 1222 Douglas 1222 Douglas Downtown Dollarama 15,140 SF Confidential Cowichan Town Centre Lease 1625 Fort Street 1625 Fort Street Downtown 8,890 SF Confidential Market Inc Sale 3170 Tillicum Road 3170 Tillicum Road Saanich Anthem Properties 476,000 SF $110,000,000 Sale 788 Goldstream Avenue/Other 788 Goldstream Avenue/Other Langford CanReal 140,612 SF $37,190,000 Sale 240 Cook Street 240 Cook Street Victoria Victoria Investor 8,762 SF $6,150,000 Sale 1002 Blanshard Street 1002 Blanshard Street Downtown Victoria Investor 10,766 SF $3,400,000 Sale 1300 Government Street 1300 Government Street Downtown GMC Properties 3,949 SF $3,000,000 Central Brentwood Bay Brewskys Sale 7100 Wallace Drive 7100 Wallace Drive 4,420 SF $2,675,000 Saanich Taphouse Colliers Canada | Victoria Office Market Report | Q4 2019 collierscanada.com/research P.3 Colliers Research Colliers Research is the industry cornerstone of authoritative statistics, forecasts and market commentary across Canada. With more than 20 years of comprehensive market data, extensive research capabilities and access to ‘live’ deal information – there is no other research firm in Canada that can provide such a complete commercial real estate research solution. With more than 20 dedicated research specialists, supported by over 35 data intelligence analysts – our world-class researchers are continuously sourcing and analyzing data in every major market across Canada – to ensure our clients receive the most accurate and powerful information to make critical decisions for their future. Core Services: • Predictive market research • Reporting on key insights and trends • Access to the latest market data • Customized research engagements For more information on the Victoria Office Market, please contact: Tyler Dolan Managing Director | Vancouver Island +1 250 414 8388 [email protected] Report Contributors: Sim Waraich Market Intelligence Analyst +1 250 414 8381 [email protected] To see the latest news from Colliers International in Canada, follow @collierscanada on Twitter and Colliers International on LinkedIn. Copyright ©2020 Colliers International The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the Colliers International | Victoria material contained in this report. 1175 Douglas Street, Suite 1110 Victoria, BC V8W 2E1 +1 250 388 6454 Accelerating success. collierscanada.com/research.
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