If they can even find a location to rent, retailers in Edmonton can expect to pay high rents driven by constriction costs that are typically 40% higher than other markets.
Despite these challenges, the market is well-worth entering, says Brett Killips, an associate partner with Cushman & Wakefield.
Those who are good at what they do are marvellously successful,” he says. “Retail, particularly in Edmonton, is mostly driven by strong household income and a strong local economy. Average store sales are typically better in Alberta than anywhere else in Canada for most retailers.”
That’s a trend that L.A. Fitness may cash in on soon.
They don’t have a store open yet, but they’re rumoured to have planned three stores,” said Killips. “Our landscape is made up of relatively few box anchors so having another one is positive.”
It’s not unusual for new entries to take an unusually-long time to find appropriate space to rent in Edmonton.
Our retail vacancy is about 3%, so landlords have lots of choices,” says Killips. “By the time anything is built, it’s fully pre-leased. There isn’t much vacancy sitting on the market.”
Some space may open up as Safeway and Sobeys determine which stores they’ll sell or close, as Loblaw and Shoppers’ Drug Mart consolidate locations and if on-line shopping becomes more prevalent, but for now, landlords are firmly in control.
On the quick service retail side, the burger guys and whatnot, there’s a half dozen possibilities anytime a retail owner wants to make a deal.”
Note: This article appears on page 58 of the Spring 2014 issue of Canadian Real Estate Magazine.
