Calgary’s retail market is expected to remain vibrant over the next 12 months due to an improving economy and rising consumer confidence.
A report by Colliers International in Calgary says the shopping centre vacancy rate in the city is expected to drop slightly from 3.21 per cent to three per cent while streetfront vacancy rates are expected to stabilize and hover around the current rate of 5.75 per cent.
“We are still the number one province on a per capita retail (spending) basis by a significant amount above the national average,” said Robert Walker, senior vice-president/partner with Colliers International in Calgary. “That still shows me that despite the vast number of layoffs downtown, the people who are employed are still spending money.
“Our average weekly income is still the highest in the country by a longshot. So they’re still spending money.”
According to the Colliers report, the shopping centre vacancy rate of 3.21 per cent in May was down from 3.74 per cent in November 2016. This is for an inventory of close to 30 million square feet.
Streetfront vacancy, which includes Kensington, 17th Avenue S.W., 4th Street S.W., and Stephen Avenue, increased slightly from 5.34 per cent in the autumn of 2016 to 5.74 per cent in the spring of this year in an inventory of 22,249 square feet.
The spending level of Calgarians is good news for retailers and developers. Colliers says there are 11 projects under construction representing 2.2 million square feet and there are 43 proposed projects for the future comprising 9.4 million square feet.
“We’ve got two different markets going on,” said Walker.
“The premium markets – the Tiffanys, the Nordstroms – are doing very well thank you very much. The value-orientated – Dollaramas, Superstores, Walmarts of the world – are doing very well.
“We are still the number one province on a per capita retail (spending) basis by a significant amount above the national average. That still shows me that despite the vast number of layoffs downtown, the people who are employed are still spending money.” – Robert Walker, senior vice-president/partner with Colliers International in Calgary
“It’s the middle road that’s kind of getting squeezed. And you’re starting to see that fallout. That middle section is what probably catered to a lot of people that were laid off. If you have money, you have money and you’re not necessarily worried about the economy. So they continue to shop at their stores. If you are concerned about the economy or if you’ve lost your job, you’re not shopping at Sunterra, but you might be shopping at Superstore. You might not be buying supplies at Canadian Tire, but you might go to the Dollar store.”
With more than a dozen other notable retail-anchored projects in various stages of planning and development, Calgary’s retail outlook is certainly looking positive. High retailer demand and a strong market response to new projects shows that 2017 is set to be the start of an optimistic upswing, says the Colliers report.
Walker says the number of projects under construction today is down. However, the number being proposed for the future has increased. Most of the projects are for after 2019 as the business community waits for the result of the next Alberta provincial election.
The Conference Board of Canada’s Spring Metropolitan Outlook painted a very good picture for the future of retail in the Calgary Census Metropolitan Area (CMA). It predicted retail sales would jump by 1.3 per cent this year to $28.6 billion in the region and then steadily climb each year to $31.4 billion by 2021.
Also, personal income per capita in the Calgary CMA is forecast to rise by 1.2 per cent this year to $63,768 and also steadily climb each year to $69,369 by 2021.
Those are numbers that have developers and retailers smiling about the future.