The Canadian Retail Real Estate Market Presented to: 2012 Real Estate Forum Presented by John G. Crombie National Retail Director Cushman & Wakefield Ltd. 416-756-5448
Retail Real Estate Canadian Retail Market – Basic Facts
RETAIL SERVICES Retail in Canada Basic Facts! Retail Sales in Canada In 2011, retailers sold an estimated $456.3 billion worth of goods and services. Record high sales of Food & Beverage in 2011 with $104.3 billion. Employment Retail sector is Canada’s largest employer. 12.5% of Canadian jobs Retail Stores in Canada • 220,000 retail establishments • 2,724 shopping centres (72 super regional) – 505 million SF (average size Shopping Centre – 186,000 SF) • 487 power centres - 162 million SF (average size Power centre – 333,000 SF) Top 100 Retailers in Canada control over 70% market share <50% of Canada’s Leading Retailers are Foreign Owned & Operated (largely US) Top 5 Foreign Owned Retailers in Canada • Wal-Mart, Costco, Safeway, NRDC Equity Partners (HBC) & Home Depot • Controls 19% of total retail sales (1,423 stores) CUSHMAN & WAKEFIELD 2
Retail Real Estate Consumer Confidence, Retail Sales - Canada & US
Source: J.C. Williams Canadian Consumer Confidence Confidence Index (2002=100) Three Year Trend 100 50 55 60 65 70 75 80 85 90 95 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 CUSHMAN & WAKEFIELD Jun-12 Jul-12 SERVICES Aug-12 RETAIL Sep-12 4
5 SERVICES RETAIL CUSHMAN & WAKEFIELD Jul-12 Apr-12 Jan. 12 Oct. 11 Jul. 11 Apr. 11 Jan. 11 Oct. 10 Jul. 10 Apr. 10 Jan. 10 Canada Oct. 09 Jul. 09 Apr. 09 Jan. 09 Canada vs. U.S. Consumer Confidence Oct. 08 U.S. Jul. 08 Apr. 08 Jan. 08 Oct. 07 Jul. 07 Apr. 07 Jan. 07 Oct. 06 Jul. 06 Apr. 06 Jan. 06 Oct. 05 Source: J.C. Williams/ICSC Jul-05 Apr-05 Jan-05 120 100 80 60 40 20 0 Consumer Confidence (2002=100)
RETAIL SERVICES Canadian Retail Sales Seasonally Adjusted $40 $39 $38 $37 (billions) $36 $35 $34 $33 $32 $31 $30 July January July January July January July January July January July 2007 2008 2009 2010 2011 2012 Source: Statistics Canada CUSHMAN & WAKEFIELD 6
RETAIL SERVICES Canadian Retail Sales Geography - 2011 92% of sales in Western & Central Canada Western Ontario (35.4%) Canada (34.4%) Alberta = 14.1% British Columbia = 13.1% Manitoba = 3.6% Saskatchewan = 3.6% Northern Canada Quebec (0.4%) (22.4%) Eastern Canada (7.5%) Yukon = 0.1% NW Territories = 0.2% Nunavut = 0.1% Nfld & Labrador = 1.7% PEI = 0.4% Nova Scotia = 2.9% New Brunswick = 2.4% Source: Statistics Canada, CUSHMAN & WAKEFIELD 7
RETAIL Canadian Retail Sales by Province – August 2011 2012 SERVICES Year Over Year % Change 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% British Alberta Prairies Ontario Quebec Atlantic Columbia Canada Source: J.C. Williams CUSHMAN & WAKEFIELD 8
RETAIL Retail Sales Productivity – Canadian Malls SERVICES Approximately $580 PSF $650 $600 $550 $500 $450 $400 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: ICSC Research CUSHMAN & WAKEFIELD 9
RETAIL Retail Sales Productivity – U.S. Malls SERVICES Approximately $440 PSF $480 $460 $440 $420 $400 $380 $360 $340 $320 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: ICSC Research CUSHMAN & WAKEFIELD 10
RETAIL SERVICES Recent Arrivals or Expressing Interest in Canada American Retailers European Retailers Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 11
RETAIL SERVICES Foreign Arrivals in Canada 1999 2011 Source: Ryerson University CSCA CUSHMAN & WAKEFIELD 12
RETAIL SERVICES Canadian Retail Space – Square Feet Per Person Shopping Centres & Big Box Stores (excludes street front) 30 27.9 25.1 25 22.4 20 18 Square Feet/Capita 14.7 15 14.1 10 5 0 Vancouver Calgary Edmonton Toronto Montreal Canadian Average Source: Ryerson University CSCA CUSHMAN & WAKEFIELD 13
RETAIL SERVICES Retail Inventory by Age Toronto & Ontario 30% 25% 20% 15% 10% 5% 0% 1950s 1960s 1970s 1980s 1990s 2000s Toronto Ontario Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 14
RETAIL SERVICES Technology Affecting Our Industry Omni-Channel Strategies Evolving multi-channel dynamics increase the importance of a BRICK & MORTAR MOBILE cohesive omni-channel QR CODE-DRIVEN VIRTUAL strategy SUPERMARKETS (South Korea Subway Stations) BRICK & INTERNET MORTAR AMAZON.COM STORE BRICK & SOCIAL MEDIA MORTAR POP-UP STORE CUSHMAN & WAKEFIELD 15
Retail Real Estate Rental Rates, Vacancy Rates
RETAIL SERVICES National Retail Rental Rates 2010 vs. 2011/12 2010 Average Net Rent 2011/12 Average Net Rent Retail Product ($/sq.ft.) ($/sq.ft.) CRU (New) $22-$28 $24-$30 Big Box (New) $16-$22 $16-$24 Pads (New) $30-$45 $32-$50 Street Front $25-$100 $30-$120 Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 17
RETAIL SERVICES High Street Rental Rates 2011 vs. 2012 (Street Level) 2011 Average Net 2012 Average Net Rent City Submarket Rent ($/sq.ft.) ($/sq.ft.) Vancouver Robson Street $240 $220 17 th Avenue SW Calgary $45 $50 Edmonton Whyte Avenue $40 $45 Saint-Catherine West (street Montreal $160 $180 level) Ottawa Sussex Drive $50 $50 Toronto Bloor Street $315 $320 Toronto Queen Street $100 $100 Ottawa Sussex Drive $50 $50 Saint-Catherine West (street Montreal $160 $180 level) Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 18
RETAIL SERVICES Canadian Retail Vacancy Rate 12% 10% 8% 6% 4% 2% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Global Real Estate Trends. Scotiabank Group, Global Economic Research (2011) CUSHMAN & WAKEFIELD 19
RETAIL Retail Vacancy Rates – Street Front SERVICES 2008 2011 12% 10% 8% 6% 4% 2% 0% Vancouver Edmonton Calgary Toronto Ottawa 2008 2009 2010 2011 Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 20
RETAIL SERVICES Retail Vacancy Rates by Shopping Centre Type 2008 2011 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Power Centre Super Regional Regional Community Neighbourhood Strip Average 2008 2009 2010 2011 Source: Cushman & Wakefield 2012 CUSHMAN & WAKEFIELD 21
RETAIL SERVICES This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Cushman & Wakefield Ltd. 2012 CUSHMAN & WAKEFIELD 22
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