Lloydminster
Retail Mall Vacancy Survey
January 2012
1.0 Economic
Background 
The City of
Lloydminster is located on the Yellowhead Highway approximately 250 km
east of Edmonton and 275 km west of Saskatoon, straddling the border (4th Meridian)
between Alberta and Saskatchewan. The population, according to
the City of Lloydminster 2009 Census, was estimated at 26,500 persons which was
a 3.84% population growth from 2007. The
Alberta side experienced a growth rate of 3.7%
since the 2007 census, and the Saskatchewan
side had a growth rate of 4.2% in the same time span. This equates to 17,402 persons (66%) on the Alberta side and 9,100 persons (34%) on the Saskatchewan side. The
Lloydminster 2011 census has been conducted, but no data was available at the
time of this survey.
Lloydminster is surrounded by some of the richest farmland in
western Canada.
The district enjoys a buoyant economy, mixed agricultural and oil industry
base. The city centres a 2,500-square-mile oil field, said to be the largest
concentration of heavy crude in North America.
Oil activities, particularly servicing, refining, pipelining and upgrading,
have been a predominant Lloydminster
activity for many years.
One measure of economic activity in a city
is the level of construction. Building permits for 2011 (obtained from
the City of Lloydminster
Engineering/Planning Dept.) were 180.3 million in 2011
compared to 112.5 million in 2010 and 47.7 million in 2009. The number of permits have increased from 546 units in 2010 to
578 units in 2011. Of these, 373 were
dwellings, up from 219 in 2010. This is
a 70% increase from 2010. This is mainly
due to the strong economy in the Lloydminster
area.
The MLS residential sales statistics for the
city show that the Saskatchewan side had 245
sales (36%) and the Alberta side had a total of 429 (64%).
This includes only urban residential properties within the City of Lloydminster. The average
house price on the Alberta side was $308,410
up marginally from $289,900 in 2010 and the average house price on the Saskatchewan side was
$233,073 also up from $224,082 in 2010. This is an
approximate 6.4% increase from the previous year for Alberta
and 4.0% increase for Saskatchewan
The average house price is the total sale price of all residential sales
divided by the number of sales. The average house price on the Alberta side is approximately 32.3% higher than the Saskatchewan side.
Notably, out of the 674 residential sales in Lloydminster, 115 or 17% were condominium
ownerships.
The following table summarizes the MLS
statistics and reflects the past 5 years:
|
Table #1
MLS RESIDENTIAL STATS
As Of December 31, 2011
|
|
Province
|
ALBERTA
|
SASKATCHEWAN
|
|
Year
|
# of Sales
|
Gross Sales
(Millions)
|
Avg. Price/home
(Alberta)
|
# of Sales
|
Gross Sales
(Millions)
|
Avg. Price/home
(Sask.)
|
|
2007
|
400
|
$106.15
|
$272,885
|
278
|
$56.13
|
$210,998
|
|
2008
|
349
|
$96.84
|
$282,334
|
208
|
$47.81
|
$234,381
|
|
2009
|
309
|
$80.35
|
$281,917
|
120
|
$23.95
|
$215,739
|
|
2010
|
313
|
$90.74
|
$289,900
|
162
|
$36.30
|
$224,082
|
|
2011
|
429
|
132.31
|
$308,410
|
245
|
$57.10
|
$233,073
|
|
Increase from
2010 to 2011
|
116
|
$41.57
|
6.4%
|
83
|
$20.80
|
4.0%
|
According to CMHC, Lloydminster apartment vacancy rates
decreased significantly from 8.4% in 2010 to 3.7% in 2011. There are
approximately 65 vacant apartments in the entire city. Even though
vacancy decreased, the average rent for a 2 bedroom apartment increased by 1.6%
from $885.00/month in 2010 to $899.00/month in 2011. The 2011 apartment survey
consisted of 1,732 suites, of which nearly one third are located on the Saskatchewan side of the
border. The following is a chart for Lloydminster
showing the average apartment rental rates from 2007 to 2011:
|
Table #2
CMHC STATS
Lloydminster - October 2011
|
|
Average Apartment Rent
|
2007
|
2008
|
2009
|
2010
|
2011
|
|
Bachelor
|
$515
|
$562
|
$508
|
$585
|
$615
|
|
1 Bedroom
|
$608
|
$658
|
$666
|
$683
|
$697
|
|
2 Bedroom
|
$755
|
$833
|
$842
|
$885
|
$899
|
|
3 Bedroom and +
|
$823
|
$872
|
$890
|
$902
|
$920
|
|
Average Rent
|
$704
|
$764
|
$771
|
$808
|
$821
|
Local industries include the Heavy Oil
Bi-Provincial Upgrader, plus several other smaller
secondary manufacturing and distributing companies, many of which are related
to the oil industry.
Husky Oil is the largest employer in Lloydminster.
Since the construction of the Bi-Provincial Upgrader
in 1992, Husky has built the 215 megawatt Meridian Co-generation Plant
which reached full operating capacity in 1999. Western
Canada's largest ethanol plant employs 25-30 full time
permanent positions. This plant supports the local economy by
purchasing goods and services from local suppliers including approximately
350,000 tonnes of feedstock from local producers, produces approximately 130
million litres of fuel grade ethanol per year and produces approximately
134,000 tonnes of distillers dried grain with solubles
(DDGS) per year. Husky Oil has also announced a future expansion of
the upgrader, however the timing of this expansion is still
undetermined.
Lloydminster has numerous parks and playgrounds, a golf course
and other leisure facilities, including an outdoor swimming pool and an indoor
swimming pool and water slide facility. Servus
Sports Centre is a $25 million dollar multi-plex
sports complex on the south side of the city. Built in 2005, this
multi-use recreational complex contains twin ice arenas, twin indoor fieldhouses, a fitness wellness center, a
physiotherapy/sports medicine center, upper level running track, exterior oval
speed skating rink, child care space, retail sports shop, concession kiosk,
lounge/kitchen, etc. and services Lloydminster and the surrounding
communities. The City of Lloydminster
has recently finished construction of a new fire hall, which is located on the
truck route or 59th
Avenue and is in the southwest quadrant of the
city. West Harvest Express is a newer hotel with direct access to the multi-plex via a second floor walkway, and was built to
service the expected clientele of Common Servus
sports Centre. Holiday Inn Express is also a newer hotel located on 44th Street
(Highway No. 16 W.) containing 100 rooms, a pool, work out room and Smitty’s restaurant.
The extreme south central area of the city has expanded greatly to
include a Tim Hortons, Subway, Papa Johns, Servus Credit Union, a new Lloydminster & District
Co-op gas station/convenience store, and numerous other businesses.
There are a full range of educational
facilities, including the multi-million dollar Lakeland College Campus
developed in the southwest sector of the city. This campus provides community
college courses up to university degree courses in several disciplines. The Vic
Juba Community Theatre is also a 555 seat arts and entertainment theatre on the
Lakeland College Campus.
As discussed above, the city has a
diversified economic base which is expected to maintain and improve for the
foreseeable future.
2.0 Study
Area and Inventory
The study area includes the entire City of
Lloydminster. The majority of the strip retail is concentrated on 44th Street
(Trans Canada Yellowhead Highway),
which runs the entire width of the city. There is a secondary Highway
commercial strip which is 50th
Avenue, the Meridian,
also known as Provincial Highway No.17. Excluded from this study is the retail
component of the downtown core. The malls are classified as either an enclosed
retail mall or strip development which includes the Cornerstone Power
Center & "Big
Box" retail. Excluded from the survey were any one-storey free-standing
buildings on pads unless they were part of a mini power center, "Big
Box" retail or in the Cornerstone
Power Center.
The total inventory is approximately
1,818,714 sq. ft., including one enclosed mall located in the centre of the
city on the Trans Canada
Yellowhead Highway on the Alberta side of the border. Anchors in this
enclosed mall include Sears, Zellers and Safeway. CRU's
(Commercial Rental Units) added this year into the strip category were 114,104
sq. ft. which included one 15,902 sq. ft. building on the Saskatchewan side
which was previously owner occupied and is now tenant occupied. Also added were
10 new buildings all built in 2011 or in the process of being built, all on the
Alberta side.
3.0
Retail Space Overview
The Lloydminster
retail market presently has 205,802 (11.3%) sq. ft. in the enclosed mall and
1,466,887 (80.7%) sq. ft. in strip retail on the Alberta
side of the city and 146,052 (8.0%) sq .ft. on the Saskatchewan side. As a result, the addition
of any retail development 10,000 sq. ft. or over can have a significant impact
on the vacancy in that category over the short term. Establishing absorption
figures over a period of time is one of the objectives of the study and will
come into play in the future as historical information is available.
The information gathered and summarized in
the following table is effective as of December 31, 2011.
|
Table #3
RETAIL MALL SURVEY
EXECUTIVE SUMMARY - Effective December 31,
2011, Conducted January 4, 2012
|
|
Type
|
Total Area
(Sq.Ft.)
|
Anchor
(Sq.Ft.)
|
CRU's
(Sq.Ft.)
|
Total
Vacant
(Sq.Ft.)
|
Vac.
2011
|
Vac.
2010
|
Vac.
2009
|
Vac.
2008
|
Vac.
2007
|
|
Enclosed
|
205,802
|
140,451
|
65,351
|
0
|
0%
|
0%
|
0%
|
0%
|
1.04%
|
|
Strip
|
1,466,887
|
710,334
|
756,553
|
35,789
|
2.44%
|
1.89%
|
1.32%
|
1.5%
|
0.24%
|
|
Total Alberta
|
1,672,689
|
850,785
|
821,904
|
35,789
|
2.14%
|
1.64%
|
1.15%
|
1.8%
|
0.4%
|
|
Total Sask.
|
146,052
|
0
|
146,052
|
0
|
0%
|
0%
|
6.47%
|
9.5%
|
15%
|
|
Total City
|
1,818,741
|
850,785
|
967,956
|
35,789
|
1.97%
|
1.52%
|
1.56%
|
2.0%
|
1.85%
|
4.0
Vacancy
The overall city-wide mall vacancy is 1.97%
with 2.14% on the Alberta side and nil vacancy
on the Saskatchewan
side. The Alberta side of the city has
92.0% of all the mall retail space while the Saskatchewan side was 8.0%. The Alberta vacancy
increased from the previous year from 1.64% in 2010 to
2.14% in 2011. Although the vacancy had
a slight increase, there is such a small amount of vacant space on the Alberta side, which is
the more desirable retail side of the city, and that a 5% vacancy is considered
a stabilized market norm, the slight increase is of no concern. Saskatchewan vacancy
remained unchanged with nil vacancy the past 2 years.
As of December 31, 2011,
the vacancy remained unchanged from 2010 to 2011 in the enclosed mall at
nil vacancy. Vacancy increased in the
strip category from 1.89% in 2010 to 2.44% in 2011. This is mainly due to 10
new buildings on the Alberta
side which have been constructed or are under construction. It is expected that they will lease quickly.
The overall city vacancy rate has increased
slightly from the previous year from 1.52% to 1.97%. As noted earlier, this
increase is of no concern.
5.0 New
Construction
Over the last decade most of the new retail
construction in Lloydminster has been
concentrated on the Alberta
side of the border. Commercial vacant land parcels fronting onto 50th Avenue
(Highway No. 17 S.) on the Saskatchewan
side of the border are actually being or have already been developed.
Added to the survey this year in the strip category were 10 new buildings,
three located in 18th Street Crossing on the south end of the city,
one located in Lloyd Commons, one on 40th Street, 4 buildings on 70th Avenue and one
building located in the Cornerstone Power Center. There has been no new strip mall construction
on the Saskatchewan
side in the past year. Also, in the
initial stages is a new development called the Triumph Center
which is to be located on the west side of 51st Avenue and between 36th
Street and 39th Street. The square footage of this development will
be added to the survey next year.
Lloydminster is strategically located between Saskatoon
and Edmonton's trade markets allowing for Lloydminster to have a
growing trade area of well over 100,000 people. The retail sector has
definitely had a positive economic impact on the community.
All indications point to a steady demand for
retail space on the Alberta side of the city and
a slight demand on the Saskatchewan
side of the city.
6.0
Rental Rates
Discussion with leasing agents indicate
that there is stronger interest on the Alberta side. Historically, the Saskatchewan side leases up more slowly, at a slightly
lower rate than comparable space on the Alberta
side.
Rental rates for the strip malls and mini
power centers on the Alberta side are in the $10.00/sq. ft. triple net to
$26.00/sq. ft. triple net range and appear to be in line with retail rates in
other major urban centers in Alberta. The rental rates on the Saskatchewan side appear
to be in the $8.50/sq. ft. triple net to $14.00/sq. ft. triple net range, which
is also in line with rental rates for cities of similar size.
Leasing inducements which include rent free
periods and/or tenant improvements appear to be minimal in the Lloydminster market. This is due primarily to
the limited strip retail available and the pent-up demand for any new
construction. The majority of new construction has been on a pre-leased basis.
7.0
Acknowledgements
Our sincere
appreciation is extended to the Lloydminster Economic Development Corporation
(LEDC) and the Engineering & Planning Department, both of
the City of Lloydminster.
Many thanks to Musgrave Developments and Musgrave Agencies for their input
regarding the "mini" Power Centers. Also, thanks to
Century 21 for their valuable input regarding leased space. Various other real
estate agents and property managers also provided valuable assistance.
8.0
Qualifications
Readers of this Study are welcome to use the
information as deemed appropriate, providing McInnes & Company
Appraisals Ltd. and Brunsdon, Junor, Johnson Appraisals are quoted as the reference
sources. The information contained herein is believed but not warranted to be
accurate. Readers are cautioned to make their own investigation before making
any financial decisions.
McInnes & Company Appraisals Ltd. is a real estate appraisal firm with many years
experience, providing a wide range of appraisal services, with the primary
market being the northwest portion of the Province
of Saskatchewan and the northeast
portion of the Province
of Alberta.
Brunsdon
Junor Johnson Appraisals who co-author this document is a real estate
appraisal firm providing a wide range of appraisal and consulting services,
with the primary market being the north central half of the Province of
Saskatchewan.
McInnes & Company Appraisals Ltd.
Ste. 201, 5303-50 Avenue
Lloydminster, SK S9V 0P9
Phone: 306-825-3500 Fax: 306-825-3507
Website: www.mcinnesappraisals.com
email
us at: office@mcinnesappraisals.com.
Last Updated: January
2012
Webmaster: Trudy Larry
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