Nor is it when it comes to the Saskatoon retail sector.
No sign of rental rate slowdown
With the competitive market retailers face in entering Saskatoon, there’s unlikely to be any nearby relief on rental rates. The upward trend the market has enjoyed in the recent past continues as good rental product remains scarce.
Upcoming developments such as Kensington, Holmwood and Cory Common are starting in the high-$20-per-square-foot range up to the low $30 per square foot.
Prime retail corridors such as downtown, 8th Street, University Heights, Stonebridge and Broadway are starting at lows of $18 per square foot and climbing to upwards of $30 per square foot.
This is equating to an approximately 3.3 per cent vacancy rate in retail, slightly up from 3.14 per cent in 2014 and 2.7 per cent in 2013. The average rental rate has steadily risen over that same period, from $25 per square foot in 2013 to $26 per square foot in 2014, settling out at $26.25 per square foot at present.
There have been doom and gloom posts for a few years now regarding the death of the traditional “bricks and mortar” retail strategy. Saskatoon has yet to be greatly impacted by the closure of any retailers due to online purchasing, but there are other elements shifting our market.
Grocery mergers, such as the large-scale Sobeys and Canada Safeway, left two large 8th Street vacancies that have yet to be backfilled.
Neither of the two Target locations have been formally snapped up either.
Although Future Shop recently closed all its shops in Canada, Saskatoon’s sole location was spared and converted into a Best Buy.
Meet the masses
With high population growth, however, the appeal for retailers continues. ICR contends that, even with the introduction of new inventory coming on this year, demand will continue to outstrip supply.
New developments include: 19,300 square feet at Cope Lane in Stonebridge; 27,000 square feet at Phase V east of Preston Crossing; and an additional 130,000 square feet at Blairmore’s Smart Centre.
We’re reporting positive absorption in all of these areas, so options remain limited in terms of new supply.
Welcome to the neighbourhood
New faces to Saskatoon’s retail landscape include Milestones restaurant on 8th Street, which just opened this spring. Atmosphere, specializing in outdoor sports and recreation, was also a new addition to Saskatoon’s golden mile. They’ve set up shop in the vacated pet store at the Centre on Circle and 8th.
Lowe’s is expected to open its west side location by this fall. This will be a first for the American home improvement chain in the city, but it’s already present in Regina.
Existing successfully branded restaurants such as Tim Hortons and Boston Pizza have continued expansion in Saskatoon, with the former finding a second location in Stonebridge on Preston and the latter’s new construction in Blairmore.