Ongoing expansion in the Saskatoon commercial retail sector has resulted in the overall supply exceeding demand.
The ICR Commercial Q3 2019 retail market update reports the average vacancy rate has edged up to 4.6 per cent.
Let’s look at where that expansion is taking place and the market locations where the most interesting vacancy story can be told.
We have close to 100,000 square feet of new retail development currently under construction.
The inventory in Hampton Village recently increased by 160,325 square feet with the tenant mix including Tim Hortons, The Canadian Brewhouse and Dairy Queen.
The city’s second Keg restaurant opened in Brighton Market, which is comprised of a total of 235,000 square feet.
About 50 per cent of 45,000 square feet within Meadows Market Phase 2 has been leased.
Saskatoon sub-market facts
It’s interesting to observe how the 20th Street corridor has transitioned in recent years to become the hip place for merchants to set up shop.
It boasts one of the lowest vacancy rates in the city at 2.2 per cent, while still offering attractive average net rental rates of $13.50 and occupancy costs of $5.
Another bright spot is Stonebridge with only 1.9 per cent vacancy. Landlords here are commanding rental rates on average $29 net plus $11.53 occupancy costs.
Three sub-markets where absorption of space has slowed include 8th Street, 22nd Street and downtown where vacancy rates are 7.5 per cent, 7.0 per cent and 5.7 per cent, respectively.
Enclosed mall redevelopments
Cineplex’s new seven-screen 30,000 square feet theatre has recently opened. This came about as a result of the departure of Rainbow Cinemas, where 20,000 square feet of retail space has been freed up for the spring of 2020.
There has been some recent unsettling news about Mountain Equipment Coop’s financial struggles. Only time will tell if those struggles will impact its spring 2020 expansion into the Saskatoon market at Midtown Plaza.
Redevelopment of the downtown Sears vacancy is progressing with the relocation of Shoppers Drug Mart complete (15,000 square feet) and the rebranded Midtown Common Food Court in 42,000 square feet on the second level.
Contact me if you’re interested in obtaining a copy of our Q3 2019 retail, industrial or office market reports.