MARKETVIEW

Canada Retail, H2 2015

Strength in premier malls eclipses

lackluster total retail sales
$706 PSF 3.1 MSF $2.7 billion 6.1%

*Arrows indicate change from mid-year.

Figure 1: Cross Border Tourism into Canada
1,800 $1.10
Thousands

1,600 $1.00

1,400 $0.90

1,200 $0.80

1,000 $0.70

800 $0.60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Tourists from other countries (L) United States Tourists (L) CAD:USD (R)

Source: Statistics Canada, January 2016.

• Bogged down by a weaker economy and lower oil

and gas prices that translated to an annual
decrease of 14.0% in the sector, total retail sales
growth decreased 240 basis points year-over-year
but remained positive at 2.2% in 2015.
• Completed regional mall expansions contributed to
a banner year in mall performance, with Canadian
mall sales averaging $706 per sq. ft. in 2015, up
7.8% over 2014.
• Spurred on by the volume of high profile retailer
exits in 2015, the national vacancy rate in
REIT/REOC portfolios increased from 3.5% in 2014
to 4.7% at year-end. Largest impacts were felt in the
regional mall format in Toronto and Ottawa.
• Approximately 3.1 million sq. ft. of retail space was
delivered in H2 2015. Toronto and Vancouver
delivered the bulk of this product through the
completion of two key mall redevelopments at CF
Pacific Centre and CF Sherway Gardens.

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Figure 2: Canada Retail Sales

Total Retail Sales Core Retail Sales* Y-O-Y % CHANGE
125
Total (%) Core*(%)
Index: January 2008 = 100 120
2010 5.6 3.3
115
2011 4.0 1.5
110
2012 2.5 1.6
105
2013 3.2 2.0
100

95 2014 4.6 3.6

Jul 2010

Jul 2011

Jul 2012

Jul 2013

Jul 2014

Jul 2015
Jan 2010

Jan 2011

Jan 2012

Jan 2013

Jan 2014

Jan 2015

Jan 2016
2015 2.2 3.6

Source: Statistics Canada, January 2016. *Less autos, parts & gasoline

RETAIL SALES

Figure 3: Canada Sales by Store Category

% Change 2014 % Change 2015
Building & Garden Equiment
Clothing & Accessories
Health & Personal Care
Recreation
General Merchandise
Furnishings & Electronics
Miscellaneous
Food & Beverage
Motor Vehile and Parts
Gasoline Stations
-15.0% -12.5% -10.0% -7.5% -5.0% -2.5% 0.0% 2.5% 5.0% 7.5%
% Change (Year-over-Year)
Source: Statistics Canada, January 2015.

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MALL RETAIL SALES

Figure 4: Canada Mall Sales (annual % change), Rolling 12-months Figure 5: Mall sales by CMA, Rolling 12-months
8% $1,200 18%
Mall Sales Growth Mall Sales (LHS)
10-Yr Avg. Annual Change (RHS)
6% $1,000 15%

4% $800 12% % change from prior full year

$ per sq. ft.

2% $600 9%

0% $400 6%

(2%) $200 3%

(4%) $0 0%
Jul 2010

Jul 2011

Jul 2012

Jul 2013

Jul 2014

Jul 2015
Jan 2010

Jan 2011

Jan 2012

Jan 2013

Jan 2014

Jan 2015

CANADA VAN TOR CAL EDM OTT MTL

Source: International Council of Shopping Centres, December 2015. Source: International Council of Shopping Centres, December 2015.

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V A C A N CY R A T E S

Figure 6: Vacancy Rate* by Retail Type

RETAIL
METRIC VAN CAL EDM WPG TOR OTT MON HAL SUM
FORMAT

GLA (000s sq. ft.) 3,636 3,887 2,127 1,159 15,004 5,305 9,034 5,178 45,331
COMMUNITY,
NEIGHBOURHOOD, Vacancy Rate (%) 2.9 0.9 1.7 0.4 5.6 3.8 6.1 8.7 4.8
STRIP
No. of Properties 44 61 35 28 161 69 146 78 622

GLA (000s sq. ft.) 3,475 5,146 3,293 1,140 19,348 4,289 7,390 1,452 45,553

POWER CENTRE Vacancy Rate (%) 2.7 2.0 4.1 2.0 3.7 3.8 3.2 6.0 3.5

No. of Properties 12 16 14 3 76 17 29 7 174

GLA (000s sq. ft.) 611 3,253 3,835 1,244 12,471 2,629 2,039 N/A 26,081

REGIONAL
Vacancy Rate (%) 3.1 5.9 8.8 16.0 6.2 11.0 5.7 N/A 7.5
SHOPPING CENTRE

No. of Properties 1 6 8 3 23 5 4 N/A 50

GLA (000s sq. ft.) 7,723 12,286 9,255 3,543 46,823 12,223 18,462 6,629 116,995

TOTAL Vacancy Rate (%) 2.9 1.5 3.3 1.9 5.1 4.2 5.6 8.5 4.7

No. of Properties 57 83 57 34 260 91 179 85 846

Source: Select retail REIT and REOC portfolios, CBRE Research, Q3 & Q4 2015. * Based on REIT and REOC owned retail properties.

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U N D E R C O N S T R U CT IO N Figure 7: Scheduled Delivery of Space (sq. ft.)

H2 2015 H1 2016 H2 2016
Vancouver 844,757 411,636 1,545,867
Calgary 683,977 378,482 378,245
Edmonton 306,780 185,208 278,788
Winnipeg 21,000 85,000 -
Southwestern Ontario 44,074 96,647 25,000
Toronto 854,780 1,149,411 1,216,000
Ottawa 167,126 419,140 616,272
Montreal 205,000 428,742 35,000
Halifax 11,215 100,773 20,300
Total 3,138,308 3,255,039 4,115,472
Source: CBRE Research, H2 2015.

Figure 8: Under Construction by CMA

Under Construction Number of Properties
4.0 40
3.5 3.8 35
Retail Space (million sq. ft.)

3.0 30

Number of Projects
2.5 25
2.4
2.0 20
1.5 15
1.0 10
1.0
0.5 0.6 0.8 0.7 5
0.0 0
VAN CAL EDM TOR OTT MTL
Source: CBRE Research, H2 2015.

Figure 9: Under Construction by Retail Type

Regional Mall* 45.7%

Mixed-Use 23.4%
Community Centre 12.7%
Power Centre 11.0%
Outlet Centre 4.0%
Neighbourhood Centre 3.2%

Source: CBRE Research, H2 2015. * Expansion

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Figure 10-a: Select Retail Developments – Regional Mall

Project Owner/Developer Location Size (sq. ft.) Target Completion Date

Square One Shopping Centre* Oxford Mississauga, ON 195,000 2016
Yorkdale Shopping Centre* Oxford, AIMCo Toronto, ON 298,000 2016
Rideau Centre* Cadillac Fairview Ottawa, ON 230,000 2016
Tsawwassen Mills Ivanhoe Cambridge Vancouver, BC 1,200,000 2016
CrossIron Mills* Ivanhoe Cambridge Calgary, AB 46,000 2017
*Expansion/Refurbishment
Source: CBRE Research, H2 2015.

Figure 10-b: Select Retail Developments – Other (Urban, Mixed-Use)

Project Owner/Developer Location Size (sq. ft.) Target Completion Date

L’Avenue Broccolini, Carttera Montreal, QC 32,500 2016
Calgary City Centre Cadillac Fairview Calgary, AB 30,000 2016
One York Street Menkes Developments Toronto, ON 200,000 2016
One Bloor East Great Gulf Toronto, ON 105,000 2016
Centreview Onni Montreal, QC 90,000 2017+
Source: CBRE Research, H2 2015.

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we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness.
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