Locations
Traditionally, the general economic activity affecting Saskatchewan’s commercial real estate industry is impacted by three main outputs: agriculture, energy and potash.
The Conference Board of Canada’s forecast of two per cent GDP growth in 2016 is based on a resumption of typical agricultural production and somewhat lessening declines in the energy sector.
I’m not sure I agree with the assumption we will see recovery in the energy sector next year. Certainly, however, a lower loonie contributes to a stronger export market with the U.S., by far our largest customer.
We believe 2016 will see some growth; two per cent may be a bit optimistic.
The Royal Bank of Canada forecasts 3.2% retail growth for this province. That is an achievable number if we continue to grow our population.
Twelve secondary markets
We have chosen 12 cities to track.
In order of descending population count varying from 45,000 to 5,500 they are: Prince Albert, Moose Jaw, Lloydminster, Yorkton, North Battleford, Swift Current, Estevan, Weyburn, Martensville, Warman, Humboldt and Kindersley.
Every city is reporting continued growth over the next decade. Annual projected growth for this period varies from 0.17% to 11.4%. To classify growth of 9.45% (Martensville) and 11.4% (Warman) every year for a decade as a boom is an understatement!
Captured interest from nationals
Alvaro Campos, ICR’s Business Manager and Market Analyst, reports, “More and more of Saskatchewan’s secondary markets are starting to capture the interest of retailers. As these markets continue to experience positive population growth, retailers will continue to be attracted to these areas.”
“The emergence of online shopping has changed the outlook of many retailers in terms of expansion. However, consumers can’t go online to purchase a sandwich or a burger, and this differentiator will continue to fuel the expansion of food users throughout the province,” explains Campos.
Vacancy statistics
Here’s a snapshot of our review of the vacancy rate in each market which as you can see varies from a high of 8.70 to a low of 3.51 per cent:
* Prince Albert: 5.38 per cent;
* Moose Jaw: 5.10;
* Lloydminster: 3.51;
* Yorkton: 6.8;
* North Battleford: 5.38;
* Swift Current: 4.46;
* Estevan: 5.56;
* Weyburn: 5.55;
* Martensville: 5.83;
* Warman: 7.44;
* Humboldt: 6.75;
* Kindersley: 8.70.
We’ll take a look again at the end of 2016 to check the accuracy of RBC’s forecast for retail growth. For a more detailed read of our recent report: Secondary Market Outlook.
Industry Events
Locations
