Retail Report. Metro Vancouver Annual Retail Market Report

Transcription

1 2017 Retail Report Metro Vancouver Annual Retail Market Report

2 Market Overview METRO VANCOUVER MARKET The Metro Vancouver retail market continues to lead BC retail growth as we enter Industry demand is driven by retail consumer sales which average $6.1 Billion per month in British Columbia the highest in Western Canada. In regards to the residential real estate industry; Metro Vancouver had its third highest selling year on record, despite an overall decline of 5.6% in the number of recorded sales when compared to The decline is in large part due to the lack of available supply as well as escalating home prices during the first half of 2016 causing public demand for government intervention. The announcement of the 1% Vacant Homes Tax in the City of Vancouver which came into effect January 1st 2017 as well as the 15% Foreign Buyer s Tax introduced on August 2nd 2016 contributed to an easing of upward pressure on the market. Demand remained strong for residential development in 2016 as the number of housing starts across Metro Vancouver experienced a 34% increase when compared to 2015, according to CMHC data. The BC economy continues to show resilience despite national and international economic uncertainty by adding over 69,000 jobs to the province during 2016; the highest job growth in the country. Job growth is expected to increase throughout 2017 with the recent federal and provincial government approval of the Kinder Morgan Trans Mountain Pipeline Expansion creating job opportunities in Northern BC. British Columbia also led Canada in retail sales throughout this past year with the latest reading taken in October 2016 amounting to $6.4 Billion; an 8.4% increase when compared to October The BC retail industry showed a few key trends throughout 2016; chief among them being an increased focus on omni-channel opportunities as well as pop-up stores for new retailers testing the waters of Vancouver s retail market. While both of these trends are expected to continue, the top trend for Metro Vancouver retail in 2017 is an emphasis on international retailers entering the Canadian or Western Canadian- market for the first time. An example of this is Metro Vancouver welcoming the much anticipated Japan-based retailer Muji to the market in early 2017 and also expecting to welcome fellow Japanese fashion retailer Uniqlo later this year. Continuing this trend is the expansion of high-end international brands such as Sandro and Maje, Van Cleef & Arpels, COS and Cartier. Retail supply in Metro Vancouver increased with over 1,800,000 square feet of retail space built out during 2016; in large part due to the opening of Tsawwassen Mills in South Delta on October 5th Even with this increase in retail supply, Metro Vancouver remains to have the lowest amount of square feet of shopping space per capita when compared to other major Canadian cities. Retail demand shows no sign of slowing in 2017 as major mixed-use developments with retail components as well as master-planned communities begin construction this year. Despite a record year in commercial investment sales, the retail investment market remained relatively stable during 2016 with sales transactions totaling $1.48 Billion compared to $1.66 Billion in 2015, which was a particularly strong year for retail investment sales in Metro Vancouver. Due to the lack of available supply, the market recorded just 29 investment transactions between $5 million and $10 million representing 14% of the total sales figure. The market saw 34 transactions above $10 million, representing 63% of the total sales figure. The most notable transaction for the year was the sale of Royal City Centre in New Westminster for $114.7 Million has started off strong with a $1.9 Billion sale by Cadillac Fairview to the Ontario Pension Board and the Workplace Safety and Insurance Board who purchased 25 percent each. The 50 percent sale of assets in Vancouver including Pacific Centre (which was recently recorded as having Canada s third highest retail sales per square foot) closes January 31st MACROECONOMIC FACTORS BRITISH COLUMBIA Q READ TREND Unemployment Rate 5.5% Dec q Total Building Permits $ Billion Dec p Retail Sales $6.4 Billion* Nov p Consumer Price Index Dec p Net Population (2016) +0.28% Nov p *Seasonally adjusted CANADA Q READ TREND Consumer Price Index Dec p Total Building Permits $ Billion Nov q CAD/USD $0.753 Dec q Prime Lending Rate 2.70% Dec Overnight Rate 0.509% Dec lee associates.com

3 Market Overview THE CITY OF LOUGHEED BY SHAPE PROPERTIES The City of Lougheed is a 40-acre master planned community centred around the current Lougheed Shopping Centre with redevelopment densification of 1.4 million SF of retail, 1 million SF of office space and on-site residential homes. GILMORE PLACE BY ONNI GROUP Gilmore Place is a mixed-use master planned community development in Burnaby located at the Gilmore SkyTrain Station with the first phase now underway. CURRENTLY UNDER CONSTRUCTION AND POTENTIAL DEVELOPMENTS LOWER MAINLAND DEVELOPER PROJECT NAME MUNICIPALITY RETAIL SIZE NOTABLE TENANTS ESTIMATED COMPLETION Shape Properties The Amazing Brentwood Burnaby 547,192 TBD Q Onni Group Gilmore Place Burnaby 491,000 TBD TBD McArthur Glen McArthur Glen Designer Outlet Phase 2 Richmond 180,000 TBD Q Cressey Kings Crossing Burnaby 138,102 TBD Q Shape Properties The City of Lougheed Phase 1 Burnaby 102,000 TBD Q Onni Group Centreview North Vancouver 90,200 Whole Foods, Steve Nash Fitness World Q Wesgroup River District Phase 1 Vancouver 60,000 Save-On Foods, TD Bank Q EXPANDING RETAILERS CANADIAN MARKET TENANT TYPICAL SQ FT MARKET LOCATIONS* Costco 150,000 Canada 98+ La Maison Simons 100,000 Canada 17+ Saks off Fifth 30,000 Canada 25+ Nordstrom Rack 30,000 Canada 20+ Dollarama 9,000 Canada 1,050+ Urban Barn 8,000 Canada 70+ Pet Valu 3,800 Canada 700+ Tim Hortons 2,500 Canada Rudsak 2,000 Canada 50+ GNC 1,000 Canada 200+ RETRACTING RETAILERS CANADIAN MARKET TENANT TYPICAL SQ FT MARKET STORES CLOSING Sears 130,000 Canada TBC Golf Town 18,000 Canada TBC American Apparel 3,000 Canada 30 stores* Jacob 3,000 Canada 92 stores Danier Leather 3,000 Canada 76 stores Le Château 3,000 Canada 14+ stores Smart Set 2,000 Canada 107 stores** Quiznos 800 Canada TBC David s Tea 700 Canada 250+ *Canadian locations post-expansion *All 110 international stores will be closing as of April 2017 **76 of 107 stores will be converted into other Reitmans Canada Limited operated stores Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report 3

4 Downtown Vancouver Market DOWNTOWN CORE Vancouver s Downtown core continued to experience a major rejuvenation with the addition of several luxury retail tenants in Vancouver will continue to see extensive revitalization throughout 2017; one of the most notable being the redevelopment of Pacific Centre s existing plaza and dome located on the northeast corner of West Georgia and Howe Street which will add just under 30,000 square feet of retail space to the centre. Another plaza redevelopment set to open this year is Kingswood Capital s new retail building on Alberni Street which will be anchored by a 6,200 square foot Van Cleef and Arpels flagship location. The high-end Parisian jeweler will join notable tenants Prada, Stefano Ricci, Saint Laurent Paris and the expanded Tiffany & Co. which were recently introduced to Vancouver s luxury zone. Downtown Vancouver also welcomes a new location for the North Vancouver outdoor clothing brand Arc teryx who will take over the 4,060 square foot formerly-occupied Le Chateau space on Burrard Street near Robson Street. The interior is currently undergoing renovations and the store will open later this year. A few stores down on Burrard, online retailer Shoes.com have opened their brick-and-mortar location at 779 Burrard Street. One of the most notable rezoning applications put forth during 2016 was by architectural firm Musson Cattell Mackey Partnership on behalf of landowners BC Investment Management Corporation and developer Bentall Kennedy for the Canada Post building at 349 West Georgia. The proposed redevelopment would include 274,000 square feet of retail space, 512,000 square feet of office space, 201,000 square feet of above-grade parking and over 700,000 square feet of condominium and market rental housing. Upon completion, the complex would have close to 1.7 million square feet of floor space, one million of which would be new space built upon the 637,000 square foot conversion of the existing post office. GASTOWN RAILTOWN Gastown has historically been a renowned submarket of Vancouver for trendy retailers to open unique concept stores; drawing in both locals and tourists alike. The Lee & Associates Fall 2016 report highlighted this rapidly evolving retail node as having relatively low lease rates when compared to other areas of Downtown Vancouver. The end of 2016 however, proved that is no longer the case for Gastown. As the submarket evolved throughout the past year, retail lease rates continued to climb. International brands are recognizing the unique retail landscape that Gastown has to offer, with 2017 openings including notable brand Hershel, who are set to open their first Canadian location spanning 5,000 square feet. Seattlebased heritage brand Filson will be opening its first Canadian location as well; a 1,500 square foot store at 47 Water Street. Water Street will also welcome H&M s high-end brand COS in 2017, further fueling the influx of boutiques, up-scale restaurants, cafés, stylish art galleries and unique fashion retailers located in the area. YALETOWN This submarket is home to some of the city s best salons, restaurants and lounges. Proximity to high-density condo towers as well as the Canada Line SkyTrain Station at Davie and Mainland Streets drive demand in the area. Retrofit brick and beam former warehouse buildings now facilitate retail spaces and quality offices above. New entrants to the Yaletown market include fashion and home décor retailer Kokko, who will take over 20,000 square feet on the first and second floor of one of the most notable buildings in Yaletown at Homer Street. The building was previously occupied by long-standing tenant Chintz & Co., who vacated in late The interior is currently undergoing renovations and Kokko will open in early MARKET FORECAST INDICATORS METRO VANCOUVER RETAIL INVESTMENT SNAPSHOT METRO VANCOUVER INDICATOR Vacancy Net Absorption TREND TREND Number Of Trades* q New Development Rental Rates Cap Rates p q Transaction Volume* (CAD) $1.665 Billion $1.462 Billion *Number of trades and transaction volume are based on trades over $1 Million q Source: Realnet, Lee & Associates Research lee associates.com

5 Downtown Vancouver Market DOWNTOWN VANCOUVER LEASE RATE MAP Stanley harbour green park BURRARD INLET portside park Nelson oppenheimer park Robson Square ENGLISH BAY Sunset Beach Andy Livingstone Vanier Coopers Creekside Thorton George Wainborn David Lam Robson between Thurlow and Hornby boast the highest net rents in Metro Vancouver. Darker regions indicate higher lease rates. LEASE RATE TRENDS DOWNTOWN VANCOUVER MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM Alberni Street p $130 $160 $15 $30 Burrard Street (Georgia to Davie) $40 $200 $15 $40 Davie Street p $30 $65 $15 $20 Robson Street (Beatty to Burrard) p $50 $235 $20 $45 Robson Street (Bute to Denman) q $50 $120 $20 $40 Abbott Street (Expo to Hastings) $30 $50 $15 $25 *Estimated Denman $40 $75 $20 $30 Gastown p $25 $90 $15 $25 Granville Street (Downtown) p $40 $125 $15 $30 Railtown p $15 $25 $8 $14 Hornby Street $45 $180 $20 $50 Yaletown p $40 $95 $20 $30 Robson Street (Burrard to Bute) $120 $250 $50 $65 West Georgia p $35 $175 $20 $35 Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report 5

6 Vancouver Market SOUTH GRANVILLE South Granville is a sophisticated shopping district where premier brands have assembled outside of the Downtown Core. High-end apparel and furniture retailers such as Pottery Barn, Restoration Hardware, EQ3 and Anthropologie have established themselves in this affluent shopping district. Joining these notable tenants during 2016 was Structube, a home décor retailer specializing in contemporary and modern home furniture at 2401 Granville Street. There will continue to be activity in the market during 2017 as higher rates are forcing some retailers to downsize or reconsider their presence in this high-traffic central location. For example, HSBC has followed suit of other chartered banks and have downsized from 6,000 square feet at 13th and Granville to 2,750 square feet at 15th and Granville. The former HSBC space will be remodeled by landlord Austeville Properties and possibly demised into three retail units. KITSILANO (KITS) Within close proximity to The University of British Columbia, this area is popular with students and lifestyle conscious residents who enjoy Kitsilano for its organic food markets, fashion, eateries and close proximity to beaches along the south shore of English Bay. The year 2016 continued to add to Kitsilano s repertoire of unique places to eat as it welcomed Mak n Ming, a Japanese-meets-French fusion restaurant at 1629 Yew Street, Hoke Poke at 1836 West 4th Avenue and Nook -the popular eatery at York and Yew Street- will expand with another location in the former Smoking Dog space at 1st and Cypress Avenue. While buildings in Kitsilano are typically older in keeping with its laidback style, this community welcomed Orr Development s mixed-use building West Five which will feature a brand new Vancouver flagship for Rolls Royce at West 5th and Burrard. SOUTH VANCOUVER Located on Marine Drive and Cambie Street, there is an emerging sub-market in South Vancouver. The city s top developers including Onni, Intracorp, PCI and Concord Pacific have invested heavily in creating a contemporary neighborhood with over 1,700 residential units, 400,000 square feet of office space and 500,000 square feet of retail. The most notable development to date has been PCI s Marine Gateway connected to the Canada Line Station. This mixed use office/retail/residential development opened in the Spring of The retail component is grocery anchored and co-tenants include Shopper s Drug Mart, Winners, Cineplex Odeon, Steve Nash Fitness World and CIBC. Further east at the northwest corner of Fraser and Southeast Marine Drive the Super 8 Hotel site is slated for a mixeduse redevelopment with upwards of 15,000 square feet of new retail. The most significant new retail development underway will be Phase 1 of Wesgroup s 130-acre River District which will feature approximately 60,000 square feet of grocery anchored retail. Located along the Marine Drive corridor between Kerr Street to Boundary Road, the planned community will serve the growing population within the South Vancouver - Burnaby region and upon full completion will feature 155,000 square feet of retail space. NORTH SHORE The North Shore boasts some of the highest household and disposable incomes in Metro Vancouver. Royal Shopping Centre dominates the retail landscape of West Vancouver, where historic Quebec retail giant La Maison Simons has now opened a 100,000 square foot high-end fashion store. Royal continues to renovate and is currently revamping the entire North Mall. When completed in early 2017, the North side of Royal will have been de-malled and will feature a new 25,000 square foot BC Government Liquor Store, a 30,500 square foot Steve Nash Platinum Fitness Club and a new 45,000 square foot Loblaw s City Market grocery store. Along Marine Drive in North Vancouver, First Capital is finalizing a 9,000 square foot addition to Amadon Plaza and Norgate Plaza has leased 4,500 square feet to Bosley s by Pet Valu for an end cap space in the former Rockford restaurant space. In Central Lonsdale, Onni Group s Whole Foods anchored project Centerview at 13th and Lonsdale will complete construction by mid-2017 alongside co-tenants Steve Nash Fitness World and Shopper s Drug Mart. The Lonsdale Corridor in North Vancouver also continues to experience significant population growth and increased retail development. Tap & Barrel opened a 14,000 square foot restaurant inside a 100 year old building on the Shipyards Site in 2016 and future additions to the waterfront area include the construction of Lot 5, a mixed use development purposed for restaurants, retail and a hotel. There are also plans to build Metro Vancouver s largest outdoor skating rink, a water park and a concert stage. Polygon Homes is currently in the preconstruction stage at 118 Carrie Cates Court for a mixed-use development featuring 117 residential units and over 10,000 square feet of retail on the ground level which will be completed in early Also in the preconstruction stage is Concert Properties $400 Million Harbourside Waterfront development along Harbourside Drive at the foot of Fell Avenue. Upon completion in the next ten to fifteen years, the development will house roughly 800 residential units as well as 300,000 square feet of commercial space. Further redevelopment at Lonsdale Quay includes the Seabus Terminal which is slated for a $12.5 million dollar renovation to be complete by lee associates.com

7 Vancouver Market VANCOUVER LEASE RATE MAP D ENGLISH BAY CHINATOWN POWELL STREET E HASTINGS ST Vanier PRIOR ST ALMA ST DUNBAR ST POINT GREY RD W 4TH AVE W BROADWAY BLENHEIM ST MACDONALD ST KERRISDALE W 41ST AVE CORNWALL AVE ARBUTUS ST ARBUTUS ST BURRARD ST W 12TH AVE W 16TH AVE W 33RD AVE GRANVILLE ST KING EDWARD AVE OAK ST FALSE CREEK W BROADWAY CAMBIE ST Queen Elizabeth MAIN ST TERMINAL AVENUE E 41ST AVE FRASER ST E BROADWAY E 12TH AVE KINGSWAY E 33RD AVE CLARK DR KNIGHT ST COMMERCIAL DR VICTORIA DR Darker regions indicates higher lease rates. LEASE RATE TRENDS VANCOUVER MARKET MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM MAP STREET SEGMENT TREND NET RENT PSF TAX & CAM Commercial Drive (Venables to 13th Ave) p $30 $45 $10 $15 Chinatown p $18 $35 $10 $15 South Granville (5th Ave to 16th Ave) $30 $90 $20 $35 Kingsway $15 $35 $10 $15 Main Street (Hastings to 28th Ave) p $20 $50 $10 $15 West 4th Avenue (Burrard to Alma) $30 $70 $15 $25 West Broadway (Main to Granville) p $30 $65 $10 $20 West Broadway (Granville to Alma) $30 $55 $15 $20 Cambie Street (2nd Ave to 19th Ave) p $30 $75 $15 $30 East Hastings Street p $20 $40 $10 $15 Burrard Street p $35 $55 $15 $20 Fraser Street (Kingsway to King Edward) p $25 - $35 $10 - $15 Dunbar Street p $30 $50 $15 $20 Kerrisdale p $30 $55 $15 $20 East Broadway p $25 $35 $10 $15 Victoria Drive p $20 $35 $8 $15 *Estimated Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report 7

8 Metro Vancouver Markets SUBURBAN MARKETS OVERVIEW The suburban markets have seen significant retail and residential growth over the past year, most notably Tsawwassen and Burnaby. With the exception of high demand lease opportunities in close proximity to rapid transit stations or major arterials, the overall tone of retail leasing activity in the suburban markets has retailers cautiously evaluating new opportunities. BC Ferries Terminal Horseshoe Bay Cypress Provincial WEST VANCOUVER 42,694 CAPILANO LAKE VA BURNABY NEW WESTMINSTER Lighthouse CITY OF NORTH VANCOU 48,136 Shape Properties continues their redevelopment plans for North Burnaby s Brentwood Mall and are now also focused on the redevelopment of the Lougheed Town Centre Mall. The City of Lougheed will be one of Canada s largest new master-planned communities spanning 40 acres in size. Tower One of the first neighbourhood is now in the preconstruction stage and will include 566 residential units. Upon completion, the entire community will include 1500 homes, two SkyTrain lines directly on site and over 300 new shops and restaurants. University of British Columbia Pacific Spirit Regional West Point Grey Dunbar Kerrisdale ENGLISH BAY Stanley VANCOUVER 603,502 Oakridge BURRARD INLET Queen Elizabeth On Burnaby s western boundary, Onni is in the preconstruction stage for phase one of their Gilmore Place development at Gilmore Avenue and Lougheed Highway, next to the Gilmore SkyTrain Station. Comprised Vancouver International Airport Sea Island Marpole Fraser of over 12 acres of land, Onni anticipates 500,000 square feet of newly constructed retail space in addition to a large quantity of residential apartments on site. Over in South Burnaby/Edmonds, Ledingham McAllister has formally submitted an application for their four-phase master-planned community entitled Southgate City. The 52-acre site will feature up to twenty residential towers and 200,000 square feet of commercial Steveston RICHMOND 190,470 space as it evolves over the coming years. Already under construction is Cressey s Kings Crossing mixed-use GIA development site at Kingsway and Edmonds featuring three residential towers and 70,000 square feet of retail space scheduled for completion in Westham Island Ladner New Westminster continues to see strong multifamily residential growth and with it, increased demand from consumers. Anchored by Royal City Centre, Uptown (Sixth Street & Sixth Avenue) continues to be the most desirable area for retailers. In lower New Westminster, revitalization continues as Bosa Development purchased the 1.6 hectare plot at 660 Quayside Drive (between Westminster Pier and the Fraser River Discovery Centre) from Larco in early 2016 and are going forth with a multi-tower residential and commercial project on BC Ferries Terminal Tswawwassen To Victoria the undeveloped waterfront site. The project is currently in the preconstruction stage and upon completion will consist of either two or three residential towers and will also include a stand-alone building for a restaurant and a daycare facility. To Nanaimo Beach Grove Boundary B Regional P Tsawwassen RICHMOND Richmond is continuing to experience extensive residential development, particularly in the Oval Neighbourhood (North West Richmond) and along No. 3 Road with urban villages clustering around the Canada Line transit stations. The No. 3 Road corridor is transforming from a long stretch of strip malls into a growing parade of high-rise residential and commercial buildings. Lease rates along the transit route have seen sharp increases with the demolition of older existing retail and the development of mixed use projects. The Oval Neighbourhood, bordered by No. 3 Road, Westminster Highway, the Fraser River and No. 2 Road has experienced extensive residential high-rise development. When fully built-out the area will total approximately 15,600 residential units and house 35,500 residents with a mix of office and retail. Last year saw the completion of Onni s mixed-use development featuring T&T Supermarket. Cressey s Cadence project at Lansdowne Road and Gilbert Road anchored by Steve Nash Fitness World and Shoppers Drug Mart is slated for completion later this year. The newest arrival to the retail scene in Richmond during 2016 was the grand opening of Smart Centre s Central at Garden City comprising 359,090 square feet of retail anchored by Walmart at Alderbridge Way and Garden City Road. Co-tenants include Marshall s, Discount Shoe Warehouse, Bed Bath & Beyond and Bosley s by Pet Valu. lee associates.com

9 Metro Vancouver Markets METRO VANCOUVER POPULATION MAP Lynn Headwaters Regional NORTH NCOUVER 84,412 Lynn Valley Lynn Canyon Mount Seymour Provincial BELCARRA Deep 716 Cove INDIAN ARM Indian Arm Provincial BUNTZEN LAKE ANMORE 1,496 COQUITLAM LAKE Pinecone Burke Mountain Provincial PIT LAKE Golden Ears Provincial VER CHEHALIS RI V Capitol Hill Westridge Belcarra Regional PORT MOODY 32,975 Coquitlam Centre ALOUETTE LAKE STAVE LAKE view Collingwood British Columbia Institute of Technology Central BURNABY Deer Lake 223,220 Metrotown Burnaby Mountain Simon Fraser University Burnaby Lake Regional Edmonds Burquitlam Sapperton NEW WESTMINSTER 65,976 Austin Heights Maillardville FRASER RIVER Whalley Mundy COQUITLAM 126,456 Mary Hill Colony Farm Regional Fraser Islands Regional Douglas Res. Island PORT COQUITLAM 55,958 Fraser Heights PITT MEADOWS 17,736 Surrey Bend Regional Pitt Meadows Airport Haney Yennadon Rolley Lake Provincial MAPLE RIDGE 76,052 Stave Falls Steelhead NORRIS H CREEK Lake Errock Tilbury Island Queensborough Annacis Island North Delta Nature Reserve South Westminster Bear Creek Guildford Newton Green Timbers Urban Forest SURREY 468,251 Tynehead Regional Anniedale Cloverdale Barnston Island Port Kells Derby Reach Regional Walnut Grove Fort Langley Forest Knolls Albion Whonnock Glen Valley Ruskin West Heights MISSION 31,272 Mission City Hatzic Dewdney LOUGHEED HIGHWAY Deas Island Regional DELTA 100,571 Water Shed Panorama Ridge Sullivan Surrey Centre Milner Langley Airport Murrayville Hoppington Bradner Matsqui Sumas Mountain Regional Sumas Mountain Regional Greendale CHILLIWACK 77,936 Clayburn ay ark Boundary Bay Airport BOUNDARY BAY MUD BAY Sunny Side Acres Urban Forest WHITE ROCK 19,339 CANADA U.S.A. Sunny Side Douglas Brookswood Campbell Valley Regional LANGLEY 104,177 Aldergrove Aldergrove Lake Regional Aberdeen Abbotsford Airport Clearbrooke North Poplar ABBOTSFORD 133,497 Huntingdon Yarrow CANADA U.S.A. CULTUS LAKE Cultus Lake Provincial METRO VANCOUVER DEMOGRAPHICS MUNICIPALITY POPULATION* MED. AGE* AVG. INCOME** Vancouver 636, $88,663 West Vancouver 44, $196,433 City of North Vancouver 51, $79,815 District of North Vancouver 88, $126,445 Burnaby 240, $79,424 New Westminster 71, $79,499 Richmond 204, $81,899 Delta 104, $101,059 Tsawwassen $142,066 White Rock 20, $82,685 MUNICIPALITY POPULATION* MED. AGE* AVG. INCOME** Coquitlam 136, $87,995 Port Moody 36, $104,521 Port Coquitlam 59, $98,424 Pitt Meadows 19, $93,172 Mission 38, $81,765 Maple Ridge 81, $96,230 City of Langley 26, $65,640 Township of Langley 112, $110,579 Abbotsford 142, $84,904 Chilliwack 84, $79,860 Surrey 517, $96,557 *PCensus 2013 Estimate **Average Household Income, 2013 Estimate Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report 9

10 Suburban Vancouver Market PORT MOODY COQUITLAM PORT COQUITLAM Metro Vancouver s North East sector showed rapid growth in anticipation of the now-open Evergreen Rapid Transit Line. As a result, all of the nearby communities are benefitting including Port Moody with even more high-rises in the town centre. Coquitlam Centre continues to thrive along with neighbouring strip centres. The Westwood Mall anchored by the Real Canadian Superstore is underway with renovations which also feature the introduction of a new 8,000 square foot UFC Gym (the first in Metro Vancouver) alongside their sister club Steve Nash Fitness World which renewed and renovated. In Port Coquitlam, construction is almost complete for the new retail development at Maryhill Bypass and Broadway. The development includes three buildings totaling 13,500 square feet. Starbucks recently opened their drive thru location at the site; Subway and A&W will both open in early In Port Moody, the owners of the Flavelle mill waterfront property Flavelle Oceanfront Development have again formally submitted an application to amend the Official Community Plan. The much-anticipated plan for a high-density mixed-use development requires the Board of Metro Vancouver to remove the property s industrial use zoning to allow for the 3,000 plus residential units planned. The developer also plans for the site to have 99,000 square feet of office space, 72,000 square feet of retail and over 100,000 square feet of light industrial space upon completion. SURREY With over 1,000 new residents welcomed every month, Surrey continues to be one of the fastest growing markets in Canada and experienced the highest level of construction activity in its history during Surrey Central City is currently transitioning into a densely populated commercial node with numerous mixed-use projects slated for construction over the next 5 to 10 years. One of the most notable projects is Century Group s 3 Civic Plaza which is in the Civic Square of Surrey adjacent to City Hall and City Library. This will be Surrey s tallest building at fifty-two storeys and will feature 349 residential condos above a 144-room Marriot hotel complete with a ballroom, six meeting rooms, five storeys of office space; three of which will be a 30,000 square foot Kwantlen Polytechnic University campus as well as ground floor retail which will house Prado Café. Concord Pacific s Avenue West project is currently under construction and will be completed in Q PCI s King George Station Phase 2 is getting traction and proposes a mixed-use development which will include approximately 350,000 square feet of retail space and 450,000 square feet of class A office space. Phase I is now complete and is anchored by Coast Capital Savings new head office with over 700 employees. Additional phases of the development may include 1,200,000 square feet of residential space. 3 CIVIC PLAZA BY CENTURY GROUP This will be Surrey s tallest building at fifty-two storeys and will feature 349 residential condos above a Marriot hotel. In South Surrey, Grandview Central Shopping Centre is in the final stages of construction and is anchored by the recently opened Real Canadian Superstore as well as Goodlife Fitness and Shopper s Drug Mart. Co-tenants will include Dollarama, Party City, BCAA and Brown s Social House. These retailers will join a market of over 1,000,000 square feet of existing retail within a one kilometer radius of the southeast corner of 24th Avenue and 160th Street. In White Rock, various developments will be under way in 2017 after gaining approval in Bosa Properties will begin sales later this year on the second phase of Miramar Village and Landmark Premiere Properties acquired a 2.5 acre site upon which they are constructing three residential towers with retail and office space. The development, entitled Foster Martine will feature over 330 residential units. The renovation of Semiahmoo Mall is gaining momentum as First Capital re-merchandises around the former Zeller s at 16th Avenue and 152nd Street. DELTA LADNER TSAWWASSEN Two of the larger retail projects recently completed in Metro Vancouver are Tsawwassen Mills and Tsawwassen Commons; which were developed in tandem by Ivanhoe Cambridge, The Property Development Group and Tsawwassen First Nations. The projects are situated at the intersection of Highway 17 and 52nd Street and added 1,710,000 square feet of retail space upon its opening on October 5th A 145,000 square foot wilderness themed retail giant Bass Pro Shop anchors the Mill site and while not officially complete; Walmart, Canadian Tire, Tim Hortons, and PetSmart will anchor the large format centre Tsawwassen Commons next door. Across from Tsawwassen Mills a new boutique hotel will be built by Executive Hotels & Resorts who also purchased Tsawwassen s lee associates.com

11 Notable Transactions Splashdown this past year. The water park was previously said to be closed for good but is now undergoing extensive renovations and will be reopened as Big Splash Waterpark. The park will introduce new slides to the kids section but will also include a Vegas-style adults only section equipped with cabanas, a DJ booth and a VIP viewing deck. LANGLEY Langley is made up of several shopping districts with Willowbrook remaining the largest at 200th Street and the Langley Bypass. Activity in Willowbrook includes renovations to Wesgroup s Langley City Square which will feature new contemporary building facades, upgraded building systems, improved access and parking. Meanwhile, Willowbrook Mall will be revamped in 2017 to include a new 140,000 square foot outdoor mall expansion which will include more retail space, restaurants and places for shopper s to relax with a village feel similar to Royal. The current Toys R Us and Sportcheck spaces will be demolished for the expansion to occur. Both tenants will be relocated to the opposite side of the mall in a new corridor adjacent to Sears. ABBOTSFORD Abbotsford s most notable new retail development is Matsqui Development s McCallum Junction project located on the north east corner of Hwy 1 and McCallum Road. The 130,000 square foot development is anchored by outdoor recreation merchandiser Cabela s, who opened their 70,000 square foot location in June On Abbotsford s western boundary, Forever 21 s sister brand F21 RED opened its first Western Canadian store in January The 15,000 square foot store will compliment Highstreet Shopping Centre s 600,000 square foot open-air plaza at Mount Lehman Road and Hwy 1 anchored by Walmart, London Drugs, H&M, Steve Nash Fitness World, Milestone s and Cineplex VIP Cinema. NOTABLE RETAIL SALE TRANSACTIONS 2016 PROPERTY ADDRESS NAME MUNICIPALITY PRICE SIZE (SF) PRICE/SF PURCHASER(S) Royal City Centre New Westminster $114,700, ,386 $317 Dava Developments Ltd. Peninsula Village Shopping Centre Surrey $78,250, ,706 $458 First Capital Realty Inc Mission Junction Mission $68,050, ,533 $241 LaSalle Investment Management West Broadway Vancouver $56,250,000 37,500 $1, B.C. Ltd Canadian Private Investor 950 West Broadway Vancouver $46,000,000 25,000 $1,840 Hometop Enterprises Ltd. The Wilson Block Vancouver $38,250,000 75,155 $509 Bonnis Properties Ltd. Central Plaza Shopping Centre White Rock $29,000,000 50,000 (est) $580 Landmark Premiere Properties Ltd Homer Street* Vancouver $26,000,000 41,863 $621 Transworld Management Ltd. *Estimated NOTABLE RETAIL LEASE TRANSACTIONS 2016 PROPERTY ADDRESS NAME MUNICIPALITY TENANT SIZE (SF) Royal * West Vancouver Steve Nash Fitness World 28, Homer Street* Vancouver Kokko 21, Lonsdale Avenue* North Vancouver Steve Nash Fitness World 21, South Fraser Way* Abbotsford Get Air 18, Granville Street Vancouver Tom Lee 14, West Georgia Vancouver Canada Post 8, West Broadway Vancouver Kohler 5, West 5th Avenue Vancouver Rolls Royce 4, Burrard Street Vancouver Arc teryx 4, Victoria Drive Vancouver Tim Hortons 2, Fraser Street* Vancouver Indochine Kitchen + Bar 2,263 *Brokered by Lee & Associates Lee & Associates Vancouver 2017 Metro Vancouver Annual Retail Market Report 11

12 2017 Retail Report Vancouver Retail team Neil S McAllister Personal Real Estate Corporation Senior Vice President neil.mcallister@lee-associates.com Sean Ogilvie Vice President sean.ogilvie@lee-associates.com Howard Malchy Personal Real Estate Corporation Vice President howard.malchy@lee-associates.com Andrea Fletcher Senior Associate andrea.fletcher@lee-associates.com Russell Long, BA, DULE Associate russell.long@lee-associates.com For inquiries please contact Hayley Adams Research Associate, Retail hayley.adams@lee-associates.com Lee & Associates Vancouver 475 West Georgia Street, Suite 800 Vancouver, BC V6B 4M9 tel fax This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, Lee & Associates can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to Lee & Associates Lee & Associates Commercial Real Estate (BC) Ltd.