Edmonton retail rental rates hold amid national rise, survey finds

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Edmonton’s retail rental rate is bucking the national trend by holding steady in a few key categories, while retail rents rise across the country.

In CBRE’s latest retail rental survey released Wednesday, the commercial real estate group analyzed retail rents from across Canada over the first half of the year.

The analysis found a general rise in rents — particularly in Ottawa and Toronto — caused by a low supply and a lack of new builds due to construction costs, though Edmonton’s market showed less movement.

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Matthew Hanson, Edmonton CBRE sales representative, indicated that Edmonton’s growing reputation of affordability hasn’t just attracted the attention of new residents but also investors from outside of Alberta looking to capitalize on a growing population.

“We’ll have that many more people opening businesses and then spending at them, so in my opinion, if we can get more people, that will help retail in itself continue to thrive,” said Hanson.

CBRE analyzed the net asking rental rate for a variety of different types of retail spaces, including: regional mall ($110-130 per square foot), power centre ($22-28/sf), community-enclosed ($40-55/sf), community-unenclosed ($38-46/sf), neighbourhood ($38-45/sf), convenience/strip ($33-42/sf), mixed-use-urban ($33-42/sf), and mixed-use-suburban ($25-32/sf).

Of the eight listed categories, Edmonton’s market remained the same in the first half of the year for five of them. The three exceptions were rises in net asking rent for community-unenclosed, neighbourhood, and convenience/strip.

Hanson said Edmonton’s top retail spaces are often in suburban areas.

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“Edmonton still is a driving-centred city. We are a winter city. People rely on their vehicles for a lot of that. So suburban sites that are grocery-anchored — those are still some of our most busy and most sought-after retail,” said Hanson.

As national investors start looking at different retail spaces throughout the city, the southwest is often one of the key spots they want to see because of the surge in residents in the area, he said.

CBRE’s survey also highlighted the effect of the Edmonton Oilers’ recent playoff run, which brought in $280 million to the city. Hanson said it was good for the Downtown core and that it could help in the long term with retail rent in the area, which has suffered over the past several years.

“It starts to change the story, the narrative of Downtown and that’s kind of what we’re hoping will continue to happen,” said Hanson.

“It has gotten better and I think it’s going to continue to get better.”

While the suburban markets continue to flourish, Hanson said the changes that are needed and the ones already underway Downtown won’t happen overnight.

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“I think it takes people getting out and seeing, because everybody hears bad stories and that kind of sits with you. But I think if you would have gone a year ago, or two years ago, I think that most people would agree that it’s improving,” he said.

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