It what may be a surprise to some, Alberta’s capital city appears well placed to come out of the pandemic with its retail foundation firmly in place, according to Altus Group and leading real estate companies.
Last year Edmonton posted a tightening in the retail vacancy rate to 4 per cent, despite 1.5 million square feet of new shopping space added to the market.
Despite all of the new shopping options, JLL reported that net retail rents hit $24.88 per square foot in 2019, the highest level since 2016.
The inevitable store closures both nation-wide and locally during the pandemic have made several big retailers cautious in their plans for growth and expansion; however, companies eyeing Edmonton seemed unaffected by this trend, according to Cushman & Wakefield.
In 2019 big-box retailers and big brands such as Forever 21, Home Outfitters, Lowe’s and Payless Shoe Source either closed locations or ceased operations altogether in Edmonton. However, some of these spaces have already been backfilled by retailers that promote unconventional features to their services such as engaging and experiential retail, revamped brick-and-mortar stores, and e-commerce strategies, Cushman & Wakefield reports.
Japanese fashion retailer Uniqlo started a national expansion by opening a storefront at West Edmonton Mall. Canada Goose opened a 5,000-square-foot space that boasts the country’s largest ‘cold room’. Laura, Brown Shoes and Evelyn Charles have occupied 10,000 square feet of the former Target location.
Mayfield Toyota is anticipated to transform approximately 117,000 square feet in Canada’s biggest mall, along with the construction of a 200,000-square-foot service centre. In addition, Aurora Cannabis opened its 11,000-square-foot flagship store at West Edmonton Mall.
Over a year into legalization, the billion-dollar market for recreational cannabis has made impressive strides. In Alberta, the province allows privately run retail stores to sell cannabis rather than government-run entities only. This has resulted in a swift rollout of cannabis retail locations in Alberta.
As welll, the Valley Line transit is already changing the retail landscape of southeast Edmonton, JLL states.
Morguard is planning to transform the 30 acres Bonnie Doon Mall site into a diverse mixed use district that will feature over 4,000 residential units, senior housing, retail, and public spaces. Further down the line, RioCan Real Estate Investment Trust is planning to build a single-level shopping centre at Millwoods Town Centre. This site encompasses 62 acres and will eventually house retail, restaurants, and nearly 2,000 housing units. RioCan notes in its marketing plan that Edmonton’s average household income is $144,000.
Manulife Investments Management has announced that it will invest $30 million to overhaul the Manulife Place retail podium. Construction is expected to be completed by the end of 2021.
“The City of Edmonton is undergoing a renaissance that will breathe life into its downtown service and amenity offerings,” said Ted Willcocks, Manulife Investment Management’s global head of asset management, real estate.
One Properties and the Katz Group, meanwhile, are building out the 25-acre ICE District two blocks to the north of the Manulife Place. The ICE Disttict includes more than 200,000 square feet of retail space. A Loblaws City Market grocery store is a confirmed new tenant for the development.
Outside of downtown, Edmonton has a number of retail centres, in addition to the West Edmonton Mall, that have performed very well and attract top tenants.
• Southgate Centre is the fifth-most productive shopping centre in Canada in terms of sales per square foot.
• Londonderry Mall saw more than $130 million invested into the centre over the past five years that included the addition of a Simons department store, Retail-Insider reports.
• South Edmonton Common now houses a large Ikea as well as Nordstrom Rack and Saks OFF 5TH, a new-concept Canadian Tire and other retailers.