Watch above: Target closed up shop… now some ladies wear stores could be on the chopping block in Canada… but what does it all mean for the retail climate locally? Joel Senick found out.
SASKATOON – A Saskatchewan-based real estate group doesn’t expect demand for retail space to slow down any time soon in Saskatoon.
“We don’t in the foreseeable future really see a slowdown in the retail side of things,” said Josh Walchuk, an ICR commercial real estate sales associate.
The retail market vacancy sits at roughly 3.3 per cent in Saskatoon, according to ICR, slightly down from what the group would consider a healthy market.
“Five per cent vacancy is what you would consider to be a normal rate, a healthy rate where you don’t have an abundance of vacancy and you don’t have a landlord’s or tenant’s market,” said Walchuk.
READ MORE: Saskatoon Future Shop closes
However, the low vacancy keeps Walchuk and other sales associates busy as demand in Saskatoon’s new neighborhoods continues to grow. In some areas, vacancy rates are much higher than the city average, with developers banking on future growth.
Vacancy isn’t always a negative, according to Kent Smith-Windsor, executive director of the Saskatoon Chamber of Commerce. He added that in past years there has been little room for businesses to expand into the city.
“Having some options in the market is certainly healthier than no options because it’s very difficult to present something new when everything’s occupied,” said Smith-Windsor.
READ MORE: Target Canada closing another 62 stores before Easter
However the low vacancy rate may bode well for landlords looking to fill large space. Target will officially close its doors Thursday in Lawson Heights. It’s a situation that carries similarities to when Walmart left Confederation Mall in 2010. It was eventually replaced by Canadian Tire.
“That work was already being done ahead of time,” said Toby Esterby, Confederation Mall’s shopping centre manager, of the transition in 2010.
“Before a lot of these announcements go public there’s rumblings of them at the leasing level, at the mall level that we know and we can prepare for,” he added.
While Confederation Mall is home to Canadian Tire, Safeway and Petland, Esterby said it does have a number of vacancies within its premises. However, he said some are by design to make room for a multi-million dollar renovation project that he says will “completely change the landscape of the mall.”
The emergence of retail development in Saskatoon’s new suburban neighbourhoods has forced retail landlords in the core sectors of the city to adapt and re-imagine their buildings, according to Walchuk.
“It’s forced them to look at redevelopment,” said Walchuk.
“Those that stand still really pay the penalty; those that change really see the opportunity,” said Smith-Windsor.
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