The overall retail vacancy rate in Calgary decreased from 5.9 per cent in the first half of 2019 to 5.5 per cent by the end of the year, according to a new report by commercial real estate firm CBRE.
The report said the Calgary retail market experienced 422,150 square feet of positive absorption in the second half, largely due to strong leasing activity in new developments in particular Skypointe Landing, Savanna Bazaar, and Legacy Village.
Positive absorption is the change in occupied space in a market.
CBRE said Calgary’s major retail nodes including 17th Avenue S.W., 4th Street S.W. and Kensington have seen upwards of 20 per cent turnover since 2017.
And property tax increases continue to present challenges for retailers in an already sluggish economy, especially in the 17th Avenue retail corridor, it added.
“The second half of 2019 closely resembled the first half of the year as one of changing landscapes for Calgary’s retail sector. The loss of major retailers including Lowe’s and Home Outfitters, shifting consumer shopping patterns, increasing costs to operate and strong competition from online retailers have had significant impacts for many Calgary shopping centres and their tenants,” said the report.
“To keep up with evolving retail trends, enterprising landlords are implementing strategies to attract and retain tenants to their centres through capital investment towards upgrades, the addition of entertainment users and staging community events to improve the shopping experience and to drive traffic.
“Heading into 2020, we will see the continued emergence of independent retailers with unique experience offerings, the additions of non-retail amenities to shopping centres and the continued investment of capital to existing retail properties.”
Mario Toneguzzi is a business reporter in Calgary.
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