Sales from Metro Vancouver storefronts and shopping centres totalled $519 million in 2013's fourth quarter. That's up 117% from the same period a year earlier and the highest level in a decade, according to RealNet Canada Ltd., which tracks the commercial real estate market.
The heady sales reflect a robust regional retail sector, where two shopping centres are among the most profitable in North America.
Annual rankings by U.S.-based Retail Insider, released in March, showed that Pacific Centre in downtown Vancouver posted gross sales of $1,335 per square foot – No. 1 in Canada and No. 4 in North America, just behind high-end malls in Miami, Las Vegas and Los Angeles. Oakridge Shopping Centre, where sales average $1,132 per square foot, ranked No. 4 in Canada and No. 8 in North America, stated Retail Insider.
The average shopping centre in Canada posts sales of $610 per square foot, according to CBRE Ltd. The ratio is based on the leased retail space, not common areas, and on gross sales in each outlet.
Alison Branco, managing director of Pacific Centre for Cadillac Fairview, said she was pleased but not surprised at the centre's high ranking.
"We are right downtown so we get more consistent shoppers all day, every day, compared to other mall locations," she said. She also credits tenants Apple Store and Holt Renfrew for increasing gross sales figures at the centre.
Apple Store, at an average of US$6,050 per square foot, has the highest sales ratio in North America, according to retail industry reports. Holt Renfrew averages just over $1,000 per square foot.
Sales of retail assets in Metro Vancouver show that it costs $565 per square foot to buy storefront space on Davie Street in Vancouver, while prime Robson Street space can hit $2,045 per square foot, which is what SDLP Snowcat Ltd. paid for 13,000 square feet in the 1700 block of Robson in 2013.
Outlier retail space offers much lower prices. Choice Properties Real Estate Investment Trust paid $141 per square feet in its 2013 purchase of the 621,177-square-foot Real Canadian Superstore complex on Vancouver's Southeast Marine Drive, and Crombie Real Estate Investment Trust paid $30 million, or $551 per square foot, for the Safeway outlet on West Broadway.
Also in 2013's third quarter, the Fraser Heights shopping centre in Surrey sold to Kevington Building Corp. for $23.6 million, or $378 per square foot.
Retail lease rates are also location-specific. Highest annual lease rates range between$150 and $200 per square foot on Robson Street, but only between Hornby and Jervis streets.
Stroll farther west on Robson and leases fall close to the downtown average of around $75 per square foot. The hottest market is Alberni Street, where rents can nudge $150 per square foot and the vacancy rate is near zero.
Across Metro Vancouver, the overall retail centre vacancy rate is 3.5%, with large regional malls and big-box power centres posting the lowest vacancies, at 2.1% and 1.3%, respectively, according to CBRE. •