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 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) 2
Retail Real Estate Consumer Confidence, Retail Sales - Canada & US
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 Jun-12 Jul-12 Aug-12 Sep-12 Confidence Index (2002=100) Canadian Consumer Confidence Three Year Trend 100 95 90 85 80 75 70 65 60 55 50 Source: J.C. Williams 4
Consumer Confidence (2002=100) Canada vs. U.S. Consumer Confidence 120 100 Canada 80 60 40 U.S. 20 0 Jul-12 Apr-12 Jan. 12 Oct. 11 Jul. 11 Apr. 11 Jan. 11 Oct. 10 Jul. 10 Apr. 10 Jan. 10 Oct. 09 Jul. 09 Apr. 09 Jan. 09 Oct. 08 Jul. 08 Apr. 08 Jan. 08 Oct. 07 Jul. 07 Apr. 07 Jan. 07 Oct. 06 Jul. 06 Apr. 06 Jan. 06 Oct. 05 Jul-05 Apr-05 Jan-05 Source: J.C. Williams/ICSC 5
July January July January July January July January July January July (billions) Canadian Retail Sales Seasonally Adjusted $40 $39 $38 $37 $36 $35 $34 $33 $32 $31 $30 Source: Statistics Canada 2007 2008 2009 2010 2011 2012 6
Canadian Retail Sales Geography - 2011 92% of sales in Western & Central Canada Ontario (35.4%) Western Canada (34.4%) Alberta = 14.1% British Columbia = 13.1% Manitoba = 3.6% Saskatchewan = 3.6% Quebec (22.4%) Eastern Canada (7.5%) Nfld & Labrador = 1.7% PEI = 0.4% Nova Scotia = 2.9% New Brunswick = 2.4% Northern Canada (0.4%) Yukon = 0.1% NW Territories = 0.2% Nunavut = 0.1% Source: Statistics Canada, 7
Canadian Retail Sales by Province August 2011 2012 Year Over Year % Change 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% British Columbia Alberta Prairies Ontario Quebec Atlantic Canada Source: J.C. Williams 8
Retail Sales Productivity Canadian Malls Approximately $580 PSF $650 $600 $550 $500 $450 $400 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 Source: ICSC Research 9
Retail Sales Productivity U.S. Malls Approximately $440 PSF $480 $460 $440 $420 $400 $380 $360 $340 $320 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 Source: ICSC Research 10
Recent Arrivals or Expressing Interest in Canada American Retailers European Retailers Source: Cushman & Wakefield 2012 11
Foreign Arrivals in Canada 1999 2011 Source: Ryerson University CSCA 12
Square Feet/Capita Canadian Retail Space Square Feet Per Person Shopping Centres & Big Box Stores (excludes street front) 30 27.9 25 25.1 22.4 20 18 15 14.1 14.7 10 5 0 Vancouver Calgary Edmonton Toronto Montreal Canadian Average Source: Ryerson University CSCA 13
Retail Inventory by Age Toronto & Ontario 30% 25% 20% 15% 10% 5% 0% 1950s 1960s 1970s 1980s 1990s 2000s Toronto Ontario Source: Cushman & Wakefield 2012 14
Technology Affecting Our Industry Omni-Channel Strategies BRICK & MORTAR MOBILE QR CODE-DRIVEN VIRTUAL SUPERMARKETS (South Korea Subway Stations) Evolving multi-channel dynamics increase the importance of a cohesive omni-channel strategy BRICK & MORTAR INTERNET AMAZON.COM STORE BRICK & MORTAR SOCIAL MEDIA POP-UP STORE 15
Retail Real Estate Rental Rates, Vacancy Rates
National Retail Rental Rates 2010 vs. 2011/12 Retail Product 2010 Average Net Rent ($/sq.ft.) 2011/12 Average Net Rent ($/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-$120 Source: Cushman & Wakefield 2012 17
High Street Rental Rates 2011 vs. 2012 (Street Level) City Submarket 2011 Average Net Rent ($/sq.ft.) 2012 Average Net Rent ($/sq.ft.) Vancouver Robson Street $240 $220 Calgary 17 th Avenue SW $45 $50 Edmonton Whyte Avenue $40 $45 Montreal Saint-Catherine West (street level) $160 $180 Ottawa Sussex Drive $50 $50 Toronto Bloor Street $315 $320 Toronto Queen Street $100 $100 Ottawa Sussex Drive $50 $50 Montreal Saint-Catherine West (street level) $160 $180 Source: Cushman & Wakefield 2012 18
Canadian Retail Vacancy Rate 12% 10% 8% 6% 4% 2% 0% 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Source: Global Real Estate Trends. Scotiabank Group, Global Economic Research (2011) 19
Retail Vacancy Rates Street Front 2008 2011 12% 10% 8% 6% 4% 2% 0% Vancouver Edmonton Calgary Toronto Ottawa 2008 2009 2010 2011 Source: Cushman & Wakefield 2012 20
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 21
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 22