Last month, Jeff McGinley, principal of Avison Young, took time from touring representatives of three major U.S. retail clients through Calgary’s “aggressive” retail scene to remark on their jaw-dropping response.
Most U.S. retailers “are shocked by our low vacancy and competitive nature. It is radically different in Calgary,” he said.
While the retail vacancy rate in Calgary is officially 2 per cent – compared to a 10.4 per cent average in U.S. cities – Calgary’s true vacancy rate is zero in many prime retail zones, McGinley explained.
“Many Landlords are intentionally holding vacant space off the market as they are repositioning their centres. Two examples of this are the Shape Properties’ redevelopment of Deerfoot Mall and Harvard’s massive redevelopment of Eau Claire market.”
“We are in an aggressive retail marketplace,” McGinley understated.
Calgary lease rates for its top shopping strolls are also likely surprising out-of-towners. Fourth Street SW and 17th Avenue SW, where lease rates average $60 to $65 per square foot, are ranked among the top 10 most expensive retail streets in Canada, according to Colliers International. In these areas, lease rates have increased by as much as 9.1 per cent in the last year alone.
Calgary has an employment rate of less than 4.5 per cent (compared to 7.2 per cent in the U.S.) and highest average weekly wage - $1,113 - in the country.
Alberta’s retail spending volume is the third highest in the country and it soared 7.7 per cent to $6.1 billion as of mid-year, the biggest increase in Canada.
Giant U.S. retailer Target has zeroed in on Calgary, opening seven stores in the city since May. Seattle-based Norstrom, a high-end fashion retailer, is scheduled to open in Calgary next year, taking the former Sears Canada space in Chinook Centre Mall. New York retailer Saks Inc. is also scouting for top Calgary space, following its purchase by Hudson Bay Company.
It is apparent that Americans catch on fast to what it takes to make it in Calgary. “U.S. retailers are very nimble.” McGinley said, who recently toured Golf Town, Dollarama and 7-11 executives through Calgary’s retail opportunities.
