Excess Sears Canada space continues to act as an anchor on retail vacancy in Calgary which is substantially higher than the 10-year average of 3.2 per cent, according to commercial real estate firm CBRE.
The company, in a report about the first half of 2018, says overall retail vacancy was relatively flat in the first six months of this year – marginally decreasing from 6.5 per cent to 6.4 per cent.
It said 120,000 square feet of Sears Canada’s former space was leased in the first half of the year.
“Landlords have been chipping away at occupying some of these large format Sears spaces while others are identifying creative ways to repurpose in order to offset some of the empty product,” says CBRE.
“Sears former space in Brentwood Village (42,000 square feet) was leased to Ashley Furniture and Buybuy Baby and the full main floor at Oxford’s Southcentre mall (78,000 square feet) has been leased and will be occupied in late 2019. The former Sears space at North Hill Shopping Centre (208,000 square feet) will be converted into multi-family product.”
There was minimal new supply added in the first half of 2018, totalling 27,958 square feet from two projects. CBRE says Opus added nearly 7,500 square feet at Fairmount Park and Hopewell added 20,500 square feet in Mahogany Village.
There is just under 1.25 million square feet of retail space under construction and a total of close to three million square feet at total build-out of new product planned and proposed.
“The first half of 2018 was a frenzy of activity for retail space suitable for accommodating cannabis tenants. Multiple competing offers and large nonrefundable down payments were common as prospective cannabis vendors battled for retail space,” says the report.
CBRE says Calgary’s retail market is buoyed by the recovery in the overall economy as it continues to improve with a decreasing unemployment rate as well as higher migration and population. Retail sales in Alberta reached a record high in May, just under $7 billion and three per cent higher than a year ago.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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