Shopping Centers Today

OCT 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 47 of 59

Retail development progresses in Saskatoon, in Canada's Saskatchewan province, despite an economic slowdown By Steve Bergsman Heading north 48 S C T / O C T O B E R 2 0 1 8 S I T E S & C I T I E S S askatoon, the largest city in the Canadian province of Saskatchewan, is located farthest north of any of Canada's largest cities, except for Edmonton. To the south are the prairie lands, now lled with large agricultural concerns, and about an hour's ride to the north, there are forests, lakes and rocky highlands, thick with natural resources. For a while all of this was an economic bonanza — and when the U.S. was going through economic crisis, Saskatoon was a boomtown. Starting in about 2016, oil and gas, potash and uranium development stalled, farm prices fell, and Saskatoon's growth slowed. Nevertheless, with the popu- lation still growing, especially in the wider metro, the retail market continues to expand, according to Stacy Dybvig, a Saskatoon-based managing partner with ICR Commer- cial Real Estate. ‡is metro population of about 320,000 supports about a half dozen new developments, Dybvig says. Saskatoon has some 14 million square feet of retail, with a 4.5 percent vacan- cy rate, reports Maxwell Lee, a retail specialist with Colliers International. "Traditionally, we were a city with a few enclosed malls and one or two main retail corridors," Lee said. "But during the past 16 years, the metro experienced a wave of suburban growth." Saskatoon's biggest enclosed mall, Midtown Plaza, in the heart of the city, is vibrant and undergoing a renovation, says Dybvig. ‡e city's biggest open-air shopping area is the Preston Crossing power center, which includes a mix of U.S. and Canadian retailers: Cabela's, Canadian Tire, Future Shop, Michaels, Old Navy, Rona, Sobeys and Walmart. A ™h phase has been completed, Lee says, adding on some 100,000 square feet, including Bed Bath & Beyond, Ske- chers and Party City, plus restaurants. Otherwise, most of the development has taken place in the suburbs. Mead- ows Market, in Saskatoon's Rosewood community, opens this fall, with a Dollar Tree, a McDonald's and a PetSmart, as well as department store Marshalls. Per- haps the biggest suburban development is what ICR Commercial refers to as the "Brighton retail sector," to the east, which saw the recent opening of a Landmark cinema. In time, ‡e Keg Steakhouse & Bar, Motion Fitness, Save-On-Foods and Shoppers Drug Mart will arrive too. As in the U.S., neighborhood shop- ping centers here are typically supermar- ket-anchored, and particularly dominant here is Loblaw and Sobeys — the latter of which has acquired Safeway in Cana- da. With the suburban growth, a couple of companies have expanded, including locally based Federated Co-operatives and British Columbia–based Save- On-Foods. Loblaw will be opening one of its No Frills deep-discount supermarkets in the western suburbs. "It already has opened two in Saskatoon," said Dybvig. ICR Commercial holds that the average Saskatoon rental rate is C$22 per square foot (about $17), while Colliers reports a gure a few dollars higher: C$26 per square foot. Where the two rms agree is that the new suburban centers will probably usher in even higher rates still, reaching as high as C$32 to C$35 per square foot. Meanwhile, gentrication in the downtown area has brought about a rebirth of boutique shops and restaurants around First and Second avenues, according to Dybvig. ‡is, in turn, has pushed rental rates up in some of the older buildings. As for Lee, he remains moderately upbeat. "While the boom is over, retail is performing quite a bit better than other real estate sectors," Lee said. "New development this year will be [at] around 150,000 square feet, as most of the Brighton construction will come on-line in 2019 and 2020." Q The western Saskatoon community of Kensington, begun in 2013, will have a population of 8,300 by 2028, planners estimate 150k SQUARE FOOTAGE OF NEW RETAIL COMING ON-LINE THIS YEAR

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