Saskatoon retailers’ preference for moving into new inventory in existing neighbourhoods is trickling down into long-standing space.
According to Colliers International’s latest report on the city’s retail market, existing corridors are seeing increases in available space as well as a softening of lease rates as tenants look for greener pastures.
Average asking rates in existing malls and big box locations have fallen from $21.90 per square foot to $21.34, a decrease of 2.6 per cent. Meanwhile, asking rates for new inventory continue to hold steady, ranging from a low of $28 per square foot up to $36.
“Saskatoon’s retail sector has continued to evolve and mature,” said Richard Jankowski, managing director of brokerage at Colliers. “We expect to see a continued maturation of development on existing sites as our city’s growth returns to historic levels.”
In 2018, Colliers reported a 13 per cent gap between advertised and effective rents, a figure that fell to 11 per cent in 2019. Much of the drop is credited to tenant improvement allowances.
The city’s retail vacancy rate fell from 4.8 per cent to 4.61 per cent due to 385,817 square feet of absorption during the year.
Some of the new retailers in Saskatoon include Canadian Brewhouse in Hampton Village, Motion Fitness, Save-On-Foods and Shoppers Drug Mart at Brighton Market Place, Leopold’s Tavern in Evergreen Square and H&M in Midtown Plaza.
Last year, Colliers released a study that showed spending by millennials had increased by 124 per cent at restaurants since 2000 and by 111 per cent on health and wellness.
Coupled with growing online shopping, malls throughout Canada are adapting to less foot traffic by offering shoppers more options for dining, entertainment and the ability to gather and socialize, the study said.