Retail has remained the strongest asset class in Saskatoon’s commercial real estate market in 2015, according to the recent Colliers International report, Saskatoon Retail Market Q3.
“We are coming off a four-year period where more than one million square feet of retail space came into our market,” said Tom McClocklin, president and managing director of Colliers in Saskatchewan. “The Saskatoon area has been leading the country in population growth, GDP growth and retail sales, among other things, and as a result, this has been a market where retailers want to be located.”
While results show 2015 was slower for construction in retail developments, 275, 000 square feet was added to the total inventory. And while the economy slowed in Western Canada, the retail vacancy rate in Saskatoon remained at 3.93 per cent.
Rental rates for retail space have increased as a result of low vacancy and high demand. Colliers says rental rates reached as high as $35 net per square foot for prime developments.
“Factors such as the softening residential sales market and slower population growth may mean that we wait a little longer than first expected for some new suburban retail developments,” added McClocklin.
Meanwhile, sales rose slightly by 0.1 per cent in 2015; however, The Conference Board of Canada has stated that normal levels will return to Saskatchewan in 2016 and 2017.