Overbuilding and online commerce might contribute to future weakness in the Saskatchewan commercial property segment
According to Statistics Canada’s latest round of data releases, retail growth in Saskatchewan was more than 65 per cent from 2006 to 2016, the sharpest across the country.
But while this has led to robust expansion in the region’s retail real estate, Edwards School of Business professor David Williams said that this is not a sustainable state of affairs considering the current climate of overbuilding and the rise of online sales transactions.
Data from government officials revealed that 371 new business licences were issued in Q1 2017, the highest quarterly number in the last five years.
“There used to be a phrase in retail ‘if you build it, they will come,'” Williams stated. “[But] is there too much physical retail space in town? Yes.”
Williams added that the challenges that physical retail stores in the United States are facing right now, along with the recent bankruptcy of Sears, should be taken as possible warning signs of a retail downturn that may affect Saskatchewan in the near future.
However, Williams hastened to point out that the present situation might prove to be beneficial for retail stores who are about open, should they place their confidence in the economy recovering.
“Costs of labour and sites may be down, so it’s a cheaper time to develop now than rather, say, in the boom a few years ago,” Williams explained.
Related stories:
Better economic prospects for Alberta and Saskatchewan markets this year
The Vancouver retail segment’s growing demand for industrial real estate
But while this has led to robust expansion in the region’s retail real estate, Edwards School of Business professor David Williams said that this is not a sustainable state of affairs considering the current climate of overbuilding and the rise of online sales transactions.
Data from government officials revealed that 371 new business licences were issued in Q1 2017, the highest quarterly number in the last five years.
“There used to be a phrase in retail ‘if you build it, they will come,'” Williams stated. “[But] is there too much physical retail space in town? Yes.”
Williams added that the challenges that physical retail stores in the United States are facing right now, along with the recent bankruptcy of Sears, should be taken as possible warning signs of a retail downturn that may affect Saskatchewan in the near future.
However, Williams hastened to point out that the present situation might prove to be beneficial for retail stores who are about open, should they place their confidence in the economy recovering.
“Costs of labour and sites may be down, so it’s a cheaper time to develop now than rather, say, in the boom a few years ago,” Williams explained.
Related stories:
Better economic prospects for Alberta and Saskatchewan markets this year
The Vancouver retail segment’s growing demand for industrial real estate
