Calgary Retail Market UpdatePrepared for: NAIOP Calgary

Presented by:

Bernie Bayer

Taurus Property Group

• Facts & Figures

• Employment & Retail Vacancy

• Retail Sales & Rent

• Key Trends in Retail

• New Developments

• New Retailers

• Retailers Coming & Going

• Soapbox

Facts & Figures• Calgary area population: 1.32 Million

• Calgary area labor force: 798,000

• Total employed (Jan 2010): 740,000

• Unemployment: 7.27%

• Total retail inventory: 32 Million square feet

• Vacancy: 2.9%

• Developed retail space per capita: 24 sf

• Developed space per capita in US: 42 sf

• Average Retail Sales per Capita $14,000

(23% Higher than national average)

Employment & Retail Vacancy

Retail Vacancy Rate

Unemployment Rate

Retail Vacancies and Unemployment (USA)

Retail Sales & Rent

HEALTH & WELLNESS

Key Trends in Retail

FAST CASUAL RESTAURANTS

Key Trends in Retail

SHOPPERTAINMENT

Key Trends in Retail

VIRAL MARKETING

Key Trends in Retail

Chinook Centre: 180,000 sf

-Abercrombie

-Anne Klein

-Apple

-Louis Vuitton

-Michael Kors

-Tiffany & Co.

New Developments

Aspen Landing: 215,000 sf(Safeway, Shoppers Drug Mart, Banks, Mission, Crave Cupcakes, 40,000 sf medical/office )

Silverado: 120,000 sf (Grocery & Drug)

Gates of Panorama Hills: 62,000 sf(Rexall, TD Canada Trust, Tim Horton’s)

Gates of Walden: 60,000 sf(Shoppers Drug Mart, RBC, Pet Planet)

Creekside Crossing (Airdrie): 60,000 sf(Sobey’s, Original Joe’s)

New Developments

(Suburban)

Hanson Corner: 45,000 sf (Best Buy)

Centennial: 30,000 sf (Flat Iron Grill)

Eighth Avenue Place: 55,000 sf

Keynote: 40,000 sf (Sunterra)

The Bow: 24,000 sf

The Core (Holt Renfrew, H&M, Indigo, Harry Rosen)

New Developments

(Urban)

New Retailers

Rogers Video (Downsizing)

McNally Robinson (CCAA)

Office Depot (Retreating)

Rona (NOI down 12%)

Starbucks (Bad Landlords!)

Retailers in Decline

Apple ($35 Million 2009 Sales in Market Mall)

Lululemon (Net earnings up 17% in 2009)

Best Buy ($607M EBITDA in Q3 2009 +16%)

Shoppers Drug Mart ($585M NOI 2009)

Tim Horton’s ($25k per day during Olympics!)

Thriving Retailers

Soapbox

• Disconnect between policy, planning &

reality…

• The elusive “lifestyle” centre

• Retail as an amenity

• Short-term thinking

Policy, Planning & Reality• The growing disconnect between Policy and Reality

• Planners are caught in the middle…and they are unprepared

• A more livable and pedestrian oriented City is

commendable…but

• Calgary’s climate and culture are unique…and so are the

places we shop

• A myopic approach to retail planning leads to frustration

• The City needs a ‘Made in Calgary” approach to retail

planning that recognizes that we are a ‘car centric’ City with

long winters.

The Elusive ‘Lifestyle’ Centre• A lifestyle center is a development that combines the

traditional shopping mall but with leisure amenities oriented

towards upscale consumers.

• Calgary does not have a true lifestyle centre and it is unlikely

to ever have one.

• Aspen Landing is as close as we may ever see – and it is not

anchored by typical shopping mall tenants.

• Chinook Centre, Market Mall, The Core and Southcentre fill

this niche.

• Calgary’s climate does not lend itself to this format.

Retail as an Amenity

• Downtown Landlords must consider the retail

component of office buildings as an amenity.

• First consideration should be whether the retail is

consistently meeting the needs of the office tenants.

• Rent is an important but secondary consideration.

• In many cases, retail rent ranks below parking

revenue.

Short-Term Thinking

• In the past cycle, the level of demand by all types of

retail tenants far exceeded supply.

• Some Landlords completed leases with retail

tenants that were not sustainable.

• While this is devastating to an independent retailer

– it also has a negative impact on Landlords.

• Securing best in class retailers under sustainable

economic terms has exponential benefits to

Landlords.

Questions?

www.taurusgroup.com