MARKETBEAT Retail Snapshot Q2 2016 Edmonton, AB ECONOMIC INDICATORS Spending per person in Alberta is still well above the average for Canada. The national average for spending in March 2016 was National 12-Month $1,214 per person whereas Albertans spent $1,433 – the highest 2015 2016F Forecast amongst all of the provinces. Restaurants and bars remained GDP Growth 1.1% 1.4%* stable in Q2 despite the current downturn, with Albertans CPI Growth 1.1% 1.6%* spending upwards of $720 million in March 2016 alone. Alberta Consumer Spending will see a shift in the restaurant and bar industry resulting in the 1.9% 2.1%* Growth demand for different offerings and concepts. The retail industry Retail Sales Growth 1.7% 3.4%* as a whole has continued to see a shift away from mid-priced retailers. A clear divide in consumer spending has become glaringly obvious where we are seeing strong growth exhibited in 12-Month Regional 2015 2016F Forecast polar opposite segments of the retail market – extreme discount Household Income $104,113 $117,416* retailers and luxury and premium priced retailers. Population Growth 1.9% 1.2%* Outlook Unemployment 5.8% 7.9%* Edmonton has seen some popular additions to its fashion Sources: RBC Economics, Scotia Economics, Finance Ministry of Alberta *2016 industry. Londonderry Mall will be home to Edmonton’s second Forecast Simons department store, with a scheduled opening in Q4 2017, while Saks Fifth Avenue is entering the Edmonton market with two of its “Saks Off Fifth” outlet stores. One will be located in Economy South Edmonton Common (opening Q3 2016) and the other at While most of Alberta’s economy continues to adjust to lower oil Skyview Power Centre (opening Q2 2017). In terms of prices, Edmonton’s economy continued to show resilience; a Edmonton’s food and beverage market, the Brewery District in testament to the city’s diverse portfolio. Edmonton has downtown Edmonton has now officially opened, and Loblaw’s continued to create jobs throughout 2016 - adding 2,700 jobs to 40,000-sf “CityMarket” grocery store was the first retailer to open the labour force - yet the unemployment rate increased slightly to its doors. The store has made an outstanding impression in the 7.0% as the labour participation rate has continued to grow at a Oliver area with a focus on quality, fresh food. Whole Foods faster rate. While building permit values saw an overall decline Market’s first store in Alberta will be opening in Edmonton in the in the province (a decline of 14% from December 2015), third quarter of this year, with a 42,000-sf store located in the Edmonton’s construction intentions continued to grow, recording South Park Centre. Edmonton’s retail market as a whole will $2 billion in building permits. This represents an increase of 50% continue to evolve for the foreseeable future as four of the major from December 2015, and a year-over-year increase of 18%. enclosed malls (Edmonton City Centre, Londonderry Mall, West Commercial construction intentions have been positive Edmonton Mall, and Kingsway Mall) are scheduled to be throughout 2016 as firms take advantage of the slowdown in the undergoing construction in 2017. In addition to these shopping economy, which has allowed for lower interest rates and better centres, CRU development is pushing forward on retail sites labour availability. CPI increased from 1.6% to 1.7% due to the such as Manning Town Centre, Erin Ridge, Jagare Ridge, ongoing rise in gasoline prices; however, with housing costs Harvest Pointe, the Brewery District and the Ice District. Along beginning to fall, the CPI is predicted to hold at its current level. with these developments, Canada’s largest retail power centre, South Edmonton Common, has shown no slowdown in adding to Market Overview its already diverse catalogue of retailers. Chipotle, Panda Retail sales in Alberta have continued to decline, resulting in the Express and Chachi’s will be added to its roster of eateries along lowest level of spending in the past three years. Retail sales with two major retailers – Saks Off Fifth and MEC (Mountain totalled $6.1 billion in March 2016, a decline of 3.8% year-over- Equipment Co-Op), both scheduled to open next quarter. In year. With the fall in oil prices, it is no surprise that gas station addition, Ikea has announced that it will be investing $13.5 sales drove this decline (-14% year-over-year). However, million to expand its South Common location. excluding gas stations, retail sales actually increased 0.3% year- www.cwedm.com over-year. MARKETBEAT Retail Snapshot Q2 2016 Edmonton, AB Key Lease Transactions Q2 2016 PROPERTY SF TENANT TRANSACTION TYPE SUBMARKET Skyview Power Centre 30,000 Saks Off 5th Lease Northwest South Edmonton Common 31,900 Saks Off 5th Lease Southwest South Edmonton Common 35,000 Mountain Equipment Co-op Lease Southwest Key Sales Transactions Q2 2016 PROPERTY SF SELLER/BUYER PRICE / $PSF SUBMARKET Beaverbrook Square 46,589 SRF2 Beaverbrook Square Inc / Wentworth Properties Inc $13,050,000 / $280 Southeast Millwoods Plaza 34 47,798 771620 Alberta Ltd / 1937487 Alberta Ltd $11,500,000 / $241 Southeast Argyll Centre 27,816 Fancy Sock Investment Inc / G&E Vending Ltd $9,000,000 / $324 Southeast Heritage Links 11,270 1662399 Alberta Ltd / 1936324 Alberta Ltd $6,600,000 / $586 Southwest Giovanni Music 25,231 Giovanni Properties Ltd / Long Holdings Inc $5,350,000 / $212 Northwest Spruce Ridge Centre 8,520 Fuhr Farms Ltd / 1939134 Alberta Ltd 2,650,000 / $311 Northwest Key Properties Under Construction PROPERTY (Developer) SF* MAJOR TENANTS PROPERTY TYPE SUBMARKET Currents of Windermere 1,200,000 Walmart, Cabela’s, Home Depot Regional Centre Southwest Manning Town Centre & Village 850,000 Canadian Tire, Lowe’s, Cabela’s Regional Centre Northeast Erin Ridge Shopping Centre 480,971 Costco, Lowe’s Regional Centre St. Albert Albany Market Square 407,000 Walmart Regional Centre Northeast Harvest Pointe Shopping Centre 375,000 Walmart, Sobeys Regional Centre Southeast Heritage Valley Shopping Centre 303,472 N/A Regional Centre Southwest Brewery District 310,000 MEC,Shoppers,Goodlife,WInners Community Centre Central Ice District 300,000 N/A Entertainment District Central Tamarack Southeast, North and Northeast (Dream) 185,125 Shoppers, Sportchek, Michaels Community Centre Southeast Windermere Crossing 160,000 Superstore Community Centre Southwest Newcastle Centre 147,390 Sobeys, LA Fitness Community Centre Northwest Tamarack (Qualico) 114,000 Safeway Community Centre Southeast Griesbach Village 110,622 Sobeys Community Centre Northwest *Square footage represents full development build out. About Cushman & Wakefield Cushman & Wakefield Edmonton For more information, contact: Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for Suite 2700, TD Tower Retail Division occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms with 10088 – 102 Avenue Tel: 780 420 1177 revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and Edmonton, AB, T5J 2Z1 Fax: 780 424 9780 valuation & advisory. 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