Edmonton retail insight

Increased demand for retail space in Edmonton amid slowing retail sales

February 28, 2024
  • Heli Brecailo
Market news
  • The Edmonton retail-leasing market is experiencing increased net absorption and consistent leasing volumes.

  • Major international retailers, particularly in the athletic, fashion, and luxury sectors, are actively expanding their presence in the market.

  • Edmonton's consumer spending remains robust, suggesting that growth is still expected in the retail sector this year.
Net absorption continues to rise

Leasing activity in Edmonton’s retail market is increasing. Demand for retail space is surpassing supply, creating an increase in net absorption and a decrease in availability.

Major international sportswear, fashion, and luxury brands such as Nike, Uniqlo, and Moncler have announced plans to expand in the market.

Additionally, Hudson's Bay has been opening Zellers pop-up stores within select shopping centers, and Rona has converted some Lowe's locations to the new Rona+ banner.

Rental growth has slowed. However, inflation and property taxes are anticipated to trigger higher rental charges when landlords shift these expenses onto tenants.

Construction activity is currently low, with Ever Square the only major development expected for completion this year.

Most leasing activity is based on general retailing, neighbourhood centres, and malls. New retail concepts continue to be introduced at West Edmonton Mall and Southgate Centre, especially within the apparel and accessories category.

In conclusion, the Edmonton retail-leasing market is experiencing high demand and this trend is set to continue, reducing availability.

Weathering potential contraction with resilience

Although Edmonton's retail-sales growth is slowing, there are still prospects for growth in the current year. Edmonton residents have been placing a higher importance on food services, shoes, groceries, and cannabis, rather than on home improvement.

Despite a weaker economic forecast, Edmonton is in a strong position to withstand a potential decrease in the national economy. The provincial government, ongoing activity in the oil and gas industry, and a rapidly growing population are all expected to continue supporting the local economy.

In 2023, restaurants offering both full service and limited service have outperformed retail goods, and this trend is anticipated to continue with a slower growth rate in the single digits.

Efforts to revitalize downtown show first results

Increased pedestrian traffic, a change in safety perception, and more funding over the past year are all positive signs that downtown Edmonton is on the road to normalcy. However, Edmonton still lags other major Canadian cities in terms of transit ridership.

Downtown is becoming lively again due to the return of workers, the revival of events and activities, and investments from partners and government agencies. The city’s collaboration with higher levels of government to increase safety and police presence has improved.

Hosting prestigious events such as the Juno Awards continues to boost Edmonton's economy, image, and reputation. According to Expedia, Edmonton is a top destination for concert and live-performance enthusiasts.

With air-passenger traffic at more than 90% of pre-pandemic levels, Edmonton's tourism industry continues to recover, keeping its momentum.

Softening but still attractive

The retail market in Edmonton remains attractive for expanding national and international retailers. Despite the softer outlook, rapid population growth, a positive outlook for the oil industry, and the presence of high-paying government jobs sustain local retail growth.

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