SURVEYS & STUDIES
M.I.T. Appraisals Ltd. will be conducting a number of surveys in regards to vacancy levels, lease rates, etc. on retail, commercial and industrial properties.
Lloydminster Retail Mall Vacancy Survey -- Vacancy levels, absorption, and lease rates on retail commercial properties with a breakdown between Alberta and Saskatchewan. Updated annually, effective date is December 31, 2023
Researched and written by Trudy Larry & Rick Brunsdon
EFFECTIVE DEC 31, 2023
Retail Mall Vacancy Survey
January 2024
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 Stats Canada 2021 Census, Lloydminster showed a population of 31,582 persons. Of the 31,582 residents, 19,739 (62.5%) lived on the Alberta side and 11,843 (37.5%) lived on the Saskatchewan side. No new censuses have been conducted since that time.
One measure of economic activity in a city is the level of construction. Building permits for 2023 (obtained from the City of Lloydminster Engineering/Planning Dept.) were 123 permits totaling 120 million compared to 170 permits totaling 60.5 million in 2022, 189 permits totaling 77.6 million in 2021. In 2023, 19 permits were for new dwellings compared to 34 permits the previous year.
The MLS residential sales statistics for the city show that the Saskatchewan side had 130 sales (28.0%) and the Alberta side had a total of 330 (72.0%).
This includes only urban residential properties within the City of Lloydminster and does not include “conditional” sales as at December 31, 2023. The average house price on the Alberta side was $315,540 which is down from $334,323 in 2022. The average house price on the Saskatchewan side was $234,716, down from $237,393 in 2022. This is an approximate 5.62% decrease from the previous year for Alberta and 1.12% decrease 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 34% higher than the Saskatchewan side.
Out of the 460 residential sales in Lloydminster, 84 or 18% were condominium ownerships.
The following table summarizes the MLS statistics and reflects the past 5 years:
According to CMHC, Lloydminster apartment vacancy rates decreased from 7.7% in 2022 to 3.6% in 2023. Rents increased in all categories from the previous year. With the average rent $1,068 up from $1,018 in 2022, the 2023 apartment survey consisted of 2,228 suites, of which approximately 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 2019 to 2023:
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.
Cenovus Energy is the largest employer in Lloydminster. Since the construction of the Bi-Provincial Upgrader in 1992, Husky (now Cenovus) built the 215 megawatt Meridian Co-generation Plant which reached full operating capacity in 1999. Western Canada's largest ethanol plant employs approximately 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 produces approximately 130 million litres of fuel grade ethanol per year along with approximately 134,000 tonnes of distillers dried grain with solubles (DDGS) per year.
Lloydminster has numerous parks and playgrounds, as well as a golf course and other leisure facilities, including an outdoor swimming pool and an indoor swimming pool and water slide facility. The Servus Sports Centre is a $25 million dollar multi-plex sports complex located 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. Best Western Plus Meridian Hotel has direct access to the multi-plex via a second floor walkway, and was built to service the expected clientele of Servus Sports Centre. The city is well serviced with approximately 15 other hotel/motels located along the Trans Canada Highway No. 16 (44th Street) and Highway No. 17 (50th Avenue).
The original fire hall No.1 that was located in the downtown area has been sold and a new fire hall No. 1 has been built on the Saskatchewan side of the border at 37th Avenue and 47th Street. Fire hall No. 2 was built in 2010 and is located on College Drive between Lakeland College and Bud Miller All Seasons Park.
The Lloydminster Hospital has a community hospital located on the Saskatchewan side of the border. The hospital is operated by the Prairie North Health Region and also services the Alberta side of the community under contract to Alberta Health Services.
The south central area of the city along 50th Avenue (Highway No. 17), includes a Tim Hortons, Subway, Papa Johns, Servus Credit Union, a Lloydminster & District Co-op gas station/convenience store, a McDonalds, an A & W, and numerous other businesses.
In the far west central area of the city north of Highway No. 16 and west of 80th Avenue is an area known as Hampton Square, which includes a Lloydminster & District Co-op gas station, three retail buildings, and two hotels (Hampton Inn and Meridian Inn and Suites). Across Highway No. 16 in Brentwood Developments (Phase III) is the new Canadian Tire super centre, which was built in 2022.
On the east side of the city, west of 40th Avenue and south of 44th Street (Trans Canada Highway No. 16), is an area known as Iron Wells Crossing, which includes a Lloydminster Co-op gas station, Mary Browns, Tim Hortons, Solo Liquor store, the Gold Horse Casino, two hotels (Microtel Inns & Home Inn & Suites), etc.
The Gold Horse Casino is a casino totals 49,500 sq. ft. on two levels which opened in December of 2018 in the Iron Wells Crossing area along 40th Avenue and just off of Trans Canada Highway No. 16. There are 250 slot machines, 18 electronic gaming tables, 5 live gaming tables, an event centre, a deli and a bar & grill restaurant included in this facility. In the early fall of 2020, a two storey addition was attached to the east side of the casino. This addition has a building footprint of 10,535 sq. ft. for a total of 21,070 sq. ft. on two floors. The net rentable area on the main floor which will be allocated for retail will be 7,693 sq. ft. and 7,691 sq. ft. on the second floor will be allocated for offices. There is room for at least 2 more pads (either retail, restaurant or additional office). Located on the site is a recently completed Gas Bar Convenience Store that has not yet opened. As of the date of this survey, the entire site was still in the process of being converted to an Urban Reserve site. In other locations, SIGA (Saskatchewan Indian Gaming Authority) casinos have been a major tourist draw to the cities that they are located in.
In the city centre located west of 50th Avenue and south of 44th Street is a development known as City Centre which includes the anchors Real Canadian Superstore, Sleep Country, Pet Smart, Sally Beauty, Dollar Tree, Fit 4 Less, Little Caesars, an Original Joe’s restaurant, Burger King, Synergy Credit Union Head Office, etc.
There are a full range of educational facilities, including numerous schools from Kindergarten to Grade 12 and 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.
The old Centennial Civic Center is nearing the end of its economic life span. On June 27, 2023, the City of Lloydminster and Cenovus Energy announced that a new facility will be built be built and will be called the Cenovus Energy Hub. This facility is located on the Saskatchewan side of the city, east of the Gold Horse Casino on 40th Avenue and west of 36th Street. With this site selection, the project is now completed, the design phase and site has begun. This proposed facility will include an event/community arena, a hotel, 6 CRU’s (commercial rental units), and ball diamonds. A storm water retention pond is in the plans and will be integrated into the design of this district, with a future possibility of developing a trail system. The city hopes to have this facility open by the end of the third quarter in 2025.
Also of note, the Lloydminster Co-op announced its expansion on the south side of the city on the Saskatchewan side on 12th Street and 50th Avenue. A new Co-op carwash, with 10 wand wash bays and 2 automatic bays, as well as self-serve pet wash units and a small convenience store is being constructed and is currently in the final stages of construction. It is projected to open in 2024 and will employ approximately 10 people when complete.
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 No. 16), 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 "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 part of a major development such as Cornerstone, Brentwood Developments, Hampton Square, City Centre, Iron Wells Crossing, 18th Street Crossing, etc.
The total inventory is approximately 2,535,321 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 Safeway & Shoppers Drug Mart. Anchors in the strip category include The Brick, Princess Auto, Peavy Mart, Totem, Shoppers Drug Mart, Home Depot, Canadian Tire, Walmart, Sobeys, Staples, Marks, Superstore, Best Buy, Winners, Sport Chek, etc.
3.0 Retail Space Overview
The Lloydminster retail market has a total area of 2,535,321. Presently it has 199,982 (7.9%) sq. ft. in the enclosed mall category and 2,151,946 (84.9%) sq. ft. in strip retail on the Alberta side of the city and 183,393 (7.2%) sq. ft. in strip retail on the Saskatchewan side. As a result, the addition of any retail development 10,000 sq. ft. or over can have an impact on the vacancy in that category over the short term.
The information gathered and summarized in the following table is effective as of December 31, 2023.
4.0 Vacancy
The overall city-wide mall vacancy is 8.31%, which breaks down to 8.68% on the Alberta side and 3.58% vacancy on the Saskatchewan side. The Alberta side of the city has 92.8% of all the mall retail space while the Saskatchewan side has 7.2%. The Alberta side vacancy rate increased from the previous year from 7.80% in 2022 to 8.68% in 2023. Saskatchewan vacancy decreased from 8.06% in 2022 to 3.58% in 2023.
Vacancy increased in the strip category on the Alberta side from 6.98% in 2022 to 8.04% in 2023. This increase in vacancy is affected by the old Canadian Tire store (approx. 65,000 sq. ft.) closing its doors in the Cornerstone Power Centre and relocating to the Brentwood Developments Phase III area. This 65,000 sq. ft. represents approximately 3.2% of the vacancy on the Alberta side. The vacancy of one large unit can distort the vacancy in the short term.
As of December 31, 2023, vacancy decreased in the enclosed mall from 16.67% in 2022 to 15.56% in 2023 which equates to seventeen units. Themall advises that they are in the process of re-merchandising the remaining space.
The overall city vacancy rate has increased from the previous year from 7.82% to 8.31%. This vacancy rate is still considered to be relatively low and the retail sector is felt to be quite strong in Lloydminster.
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 with the exception of the casino and the Iron Wells Crossing development. Commercial vacant land parcels fronting onto 50th Avenue (Highway No. 17 S.) on the Saskatchewan side of the border have mostly been developed.
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 draw of the retail sector has definitely had a positive effect on Lloydminster’s economy.
Lloydminster is one of the most dynamic smaller cities in Canada. The city’s strategic location plus its strong foundation in agricultural, oil, and retail makes the overall economy of Lloydminster relatively stable.
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. Overall, lease rates are slightly down with the dip in the economy.
Rental rates for the strip malls and mini power centers on the Alberta side are in the $10.00/sq. ft. net to $40.00/sq. ft. 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 $8.00/sq. ft. net to $40.00/sq. ft. 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. The majority of new construction has been on a pre-leased basis.
7.0 Market Overview
The oil industry has a very significant impact on the city’s economy. According to the Alberta Government website, West Texas Intermediate (WTI), the benchmark for North American crude oil, prices have decreased over the past year by approximately 8.3%, from $84.39 USD/barrel in November 2022 to $77.38 USD/barrel in November of 2023. As of November 2023, Western Canadian Select (WCS) was trading approximately $20.77/USD/barrel lower than WTI at $56.61/USD/barrel (down from $57.44 USD/barrel the previous year). Economists predict oil prices to remain stable over the next year.
Apartment vacancies have seen a 4.1% decrease from 7.7% in 2022 to 3.6% in 2023. Apartment rental rates have increased by an average of approximately 4.9%.
The single family residential market in the city has seen a 6.7% decrease in units sold over the past year and overall, values have decreased by approximately 5.6% on the Alberta side and decreased by 1.1% on the Saskatchewan side. The residential market appears to be remaining stable after the recent economic downturn.
The retail sector has weathered the change in the economy with an approximate 4.0% increase in vacancy over the past five years. The current vacancy at 8.3% for the entire city is relatively low and is considered to be a fairly strong market.
The Gold Horse Casino opened its doors in Lloydminster in December of 2018. The facility has brought approximately 140 long term jobs to the local economy, as well as attracting customers to retail outlets and restaurants. It promotes economic growth in the community by drawing on local suppliers and supporting spin-off businesses. A portion of the Casino profits goes to community causes and priorities in the form of donations and sponsorships.
Overall, there is optimism in the market for the future.
8.0 Acknowledgements
Our sincere appreciation is extended to the Engineering & Planning Department at the City of Lloydminster. Many thanks to Musgrave Developments and Musgrave Agencies for their input regarding the "mini".
Power Centers and a sincere thanks to Century 21 for their continued support regarding leased space. Also, a huge thanks to Brentwood Developments, Springwood Developments, Avison Young, and Fort Pitt Developments for their valuable input. Various other real estate agents and property managers also provided valuable assistance.
9.0 Qualifications
Readers of this Study are welcome to use the information as deemed appropriate, providing M.I.T. Appraisals Ltd. and Brunsdon, Lawrek & Associates Real Estate Appraisals & Advisory Services 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.
M.I.T. Appraisals Ltd. is a real estate appraisal firm with over 40 years of 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 Lawrek & Associates Real Estate Appraisals & Advisory Services who co-author this document is a real estate appraisal firm providing a wide range of appraisal and consulting services, with offices in Saskatoon and Regina.
M.I.T. Appraisals Ltd.
5503-52 Street
Lloydminster, SK/AB T9V 0R7
Phone: 780-875-3500 Fax: 780-875-3539
Website: www.mitappraisals.ca
email us at: office@mitappraisals.ca.
HOME Back to Surveys & Studies
© copyright 2002
|
|