Calgary retailers and developers are anxious to meet the demand. The Calgary retail market has one of the lowest vacancy rates in all of North America, according to a recent report by Colliers International. There are an unprecedented 51 retail projects, either proposed or under construction, totalling over 13.2 million square feet throughout the city.
Recently opened retail projects range from inner-city boutiques like Fashion Central to the behemoth Cross Iron Mills mall in nearby Balzac. Most of the projects under construction are large big-box complexes intended to serve sprawling suburban areas, such as the Seton development. It’s now building its second and third phases, while across town Sage Hill Crossing is set to begin construction in 2014. Then there’s Stonegate Common, anchored to a Walmart and Canadian Tire, and several smaller projects including the proposed redevelopment of downtown’s Eau Claire Market.
“A lot of these big projects have been in the plans for a long time,” says Krystyn Gatto, a retail associate at Colliers. “Seton, for example, has been in the works for 10 years,” she says. “We’re going to continue to see strong development in Calgary because of population growth, demographics, income range and the fact that we spend more than any other province. We’re spending money and retailers want to be here.”
And there is little risk of overbuilding, even with oil prices potentially dropping. “The economy here is much more diversified than it was, say, 20 years ago and not as vulnerable to fluctuating commodity prices,” explains Michael Kehoe of Fairfield Commercial Real Estate. In fact, both Kehoe and Gatto say nearly all the new developments are pre-leased.
Retailer interest, particularly from the U.S., is another big factor. “Canada is a natural place for the U.S. to expand,” Gatto says. “We are similar shoppers, and there is brand recognition.” It used to be just Toronto, Vancouver and Montreal that attracted big brands, but now Calgary has joined the club.
That said, while large companies are flourishing in Calgary’s retail mecca, “it is tough for the mom and pops,” Gatto says. Not only is retail space at a premium and hard to find, construction and labour shortages add to the challenge.
Just ask Danielle Miller, who co-owns a franchise of Global Pet Foods with her husband. It took them nearly a year to find a suitable space. “We basically said to our agent, if anything comes up, let us know,” Miller recalls. “It took much longer than we expected.” They were surprised by the lack of availability and high costs, but did eventually find a location in the busy community of Shawnessy. “Ultimately, you have to stay flexible and optimistic.”