carleton place situation analysiscarletonplace.ca/photos/custom/cp-situationanalysis-final...

PPrreeppaarreedd bbyy DDooyylleetteecchh CCoorrppoorraattiioonn

FFoorr

TThhee TToowwnn ooff CCaarrlleettoonn PPllaaccee

CCaarrlleettoonn PPllaaccee SSiittuuaattiioonn AAnnaallyyssiiss Fall 2011

Carleton Place Situation Analysis, Fall 2011

2 Prepared by Doyletech Corporation, Research Services

Table of Contents Executive Summary ....................................................................................................................................................................................................... 4 1.0 Introduction .............................................................................................................................................................................................................. 9 2.0 Demographics ........................................................................................................................................................................................................ 10

2.1 Population .......................................................................................................................................................................................................... 10 2.2 Unemployment Rate .......................................................................................................................................................................................... 11 2.3 Average Value of Dwelling ................................................................................................................................................................................. 12 2.4 Households ........................................................................................................................................................................................................ 14 2.5 Income................................................................................................................................................................................................................ 16

2.5.1 Median Personal Income ............................................................................................................................................................................ 16 2.5.2 Average Personal Income ........................................................................................................................................................................... 16 2.5.3 Median Household Income ......................................................................................................................................................................... 17 2.5.4 Average Household Income ........................................................................................................................................................................ 18 2.5.5 Composition of Total Income, 2005 ............................................................................................................................................................ 18 2.5.6 Income Status, 2005 ................................................................................................................................................................................... 19

2.6 Commuters ......................................................................................................................................................................................................... 19 2.7 Migration............................................................................................................................................................................................................. 21

3.0 Retail Markets ........................................................................................................................................................................................................ 22 3.1 Current Retail Landscape in Canada ................................................................................................................................................................. 22 3.2 Future Trends and Forecasts ............................................................................................................................................................................. 25 3.3 Retail Data Analysis on the Competitive Communities ...................................................................................................................................... 26 3.4 Residual Demand Analysis on Carleton Place Retail Market ............................................................................................................................ 31

4.0 Industrial Markets ................................................................................................................................................................................................... 38 4.1 Current Industrial Real Estate Landscape in Canada ........................................................................................................................................ 38 4.2 Ottawa Industrial Real Estate Market ................................................................................................................................................................ 39

5.0 Residential Markets ................................................................................................................................................................................................ 45 5.1 Canadian Residential Real Estate Overview ..................................................................................................................................................... 45 5.2 Housing Starts in Ottawa and Eastern Ontario .................................................................................................................................................. 45

Appendix A: Top Retail Chains Based on Increased Number of Locations ................................................................................................................ 47 Appendix B: Top Retail Chains Based on Projected New Openings ........................................................................................................................... 48



List of Figures

Figure 1: Population Trends ......................................................................................................................................................................................... 10 Figure 2: Population Growth Rates for 1996-2001, 2001-2006, and 2006-2011 ......................................................................................................... 11 Figure 3: Unemployment Trends ................................................................................................................................................................................. 12 Figure 4: Dwelling Value Trends .................................................................................................................................................................................. 12 Figure 5: Dwellings Owned Trends .............................................................................................................................................................................. 13 Figure 6: Dwellings Rented Trends .............................................................................................................................................................................. 14 Figure 7: Household Formation Trends ....................................................................................................................................................................... 15 Figure 8: Personal Median Income Trends .................................................................................................................................................................. 16 Figure 9: Personal Average Income Trends ................................................................................................................................................................ 17 Figure 10: Median Household Income Trends ............................................................................................................................................................. 17 Figure 11: Average Household Income Trends ........................................................................................................................................................... 18 Figure 12: Composition of Total Income, 2005 ............................................................................................................................................................ 18 Figure 13: Income Status, 2005 ................................................................................................................................................................................... 19 Figure 14: OMATO Labour Force Employed in Ottawa, 2001 and 2006 ..................................................................................................................... 20 Figure 15: Migration between Ottawa and Adjacent Municipalities ............................................................................................................................. 21 Figure 16: Ottawa Retail Space Overview ................................................................................................................................................................... 24 Figure 17: 2011 Retail Sales Estimates for the Comparator Communities ................................................................................................................. 26 Figure 18: Retail Sales Per Household and Per Capita Comparisons ........................................................................................................................ 27 Figure 19: 2011 Retail Sales Estimates By Category .................................................................................................................................................. 27 Figure 20: Lanark County Retail Sales Estimates By Category, 2006-2011 ............................................................................................................... 28 Figure 21: Lanark County Retail Sales By Category, 2006-2011 (Graphical) ............................................................................................................. 29 Figure 22: Historical Retail Sales Estimates, Lanark County & Ontario ...................................................................................................................... 30 Figure 23: Total and Per Capita Expenditures for Ontario, 2010................................................................................................................................. 32 Figure 24: Population of the Retail Trade Area (Past Actuals & Future Estimates) .................................................................................................... 33 Figure 25: Per Capita Expenditures By Major Store Type for Trade Area .................................................................................................................. 34 Figure 26: Estimated Total Expenditure Volumes in Trade Area................................................................................................................................. 34 Figure 27: Estimated Total Supportable Retail Floor Space for Trade Area ............................................................................................................... 35 Figure 28: Estimated Increase in Demand for Total Supportable Retail Floor Space ................................................................................................. 36 Figure 29: Summary of Existing Inventory ................................................................................................................................................................... 36 Figure 30: Total Warranted Floor Space By 2013, Trade Area ................................................................................................................................... 37 Figure 31: Ottawa Industrial Market Review, 1998-2010 ............................................................................................................................................. 40 Figure 32: Ottawa Industrial Submarket Data for the Second Quarter 2011– West Ottawa Only ............................................................................... 41 Figure 33: Industrial Rental Rates in Carleton Place ................................................................................................................................................... 42 Figure 34: Largest Manufacturers in the Competitive Communities ............................................................................................................................ 43 Figure 35: Housing Starts, 2004-2010 ......................................................................................................................................................................... 46



Executive Summary This document serves as a situation analysis designed to inform current industrial and retail strategy development activities of the Town of Carleton Place. In addition to assessing and updating previous data collected by the Town, it provides additional analyses which serve to inform current activities. Where data was available, comparisons were drawn to neighbouring towns and villages as well as to Ontario as a whole. The following are the major findings, organized under the major sub-areas of the analysis: Demographics

Between 2001 and 2006, both Carleton Place (the town) and Beckwith (the township) experienced fairly good population growth in comparison to the others; however, both grew slower than Ontario as a whole. Also, Carleton Place is growing slower than neighbouring Beckwith Township. Beckwith’s growth rate of 5.6% between 2001 and 2006 compares to 6.7% for Drummond & North Elmsley Township, 8.0% for Lanark Highlands Township, but it is higher than Montague Township (-2.1%).

In both 2001 and 2006, Carleton Place (the town) had an unemployment rate (for both sexes) higher than the Ontario average but Beckwith (the township) had rates significantly lower than Ontario’s. However, Beckwith’s unemployment rate seems to be on an upward trend whereas Carleton Place’s appears to be going down.

Eastern Ontario communities with significant industrial and/or manufacturing activity tend to have higher unemployment rates

than those communities without such activities.

The average value of a dwelling in Beckwith Township was the highest among the twelve municipalities analyzed. However, for both Carleton Place and Beckwith the average value of a dwelling was lower than for Ontario as a whole.

Compared to other communities in the analysis, both Carleton Place and Beckwith are experiencing higher growth rates in the number of dwellings owned.

Household formation growth in Carleton Place and Beckwith are reflective of the Ontario average (although slightly lower) but notably higher than the other communities (except for Casselman). This suggests that the region is attracting new residents better than most communities in Eastern Ontario.

Median personal income in Carleton Place was $27,248 for the 2006 Census (based on 2005 income) which is essentially identical to that for Ontario as a whole ($27,258). Beckwith’s median income ($34,006) is the highest of all the communities assessed, as well as higher than that for Ontario.



Carleton Place (along with Merrickville) experienced the largest percentage growth in average personal income between

2000 and 2005, both significantly higher than the Ontario growth rate.

Median household income increased in all the communities assessed between 2000 and 2005, except for Merrickville-Wolford. While Beckwith’s percentage change (12.8%) was essentially the same as Ontario’s (12.7%) over that period, Carleton Place’s growth rate in median household income is lower than that for Ontario.

In terms of income composition, residents of Casselman and Beckwith generate the highest proportion of their total income from employment. The largest proportion of total income coming from government transfer payments is in Perth, Renfrew, and Smiths Falls.

In terms of prevalence of low income after tax, both Carleton Place (7.7%) and Beckwith (3.4%) were below the Ontario level of 11.1%, with Beckwith significantly below.

In the case of both Carleton Place and Beckwith Township, the proportion of the labour force working in Ottawa decreased between 2001 and 2006, as was the case for most OMATO1 municipalities. The analysis suggests there is significant opportunity for Carleton Place (and area) to gain a larger share of commuters to Ottawa, especially given the new highway and the diversification of federal government jobs out of East Ottawa and downtown, as the federal government continues to take advantage of space vacated by the technology sector at several sites in West and South Ottawa.

Between 2004 and 2009, Lanark County as a whole enjoyed positive net migration (of 1,222 people) with Ottawa; meaning slightly more people moved from Ottawa to Lanark County than vis versa. Slight positive net migration was experienced in each year.

Retail

While Statistics Canada is the premier source of retail sales data for Canada, they publish national and provincial numbers only (along with some data on Toronto, Montreal, and Vancouver). There are some organizations, using the Statistics Canada data, which develop their own estimates for smaller cities, towns, and regions across Canada (the most prominent being FPmarkets and the Conference Board of Canada).

Strong Canadian retail sales and healthy retail property markets over several years have attracted the attention of foreign retailers/developers. They are impressed with Canada’s relatively steady sales growth, higher average sales per square foot,

1 Ontario Municipalities Adjacent to Ottawa - OMATO.



and lower density of shopping space per capita.2 The influx of American and European retailers into Canada is expected to continue. Going forward, several analysts expect that some established Canadian retailers will disappear as US-based retailers seek easy and quick Canadian market entry through outright acquisition rather than by store-by-store expansion.

FPmarkets estimates that total 2011 retail sales in Carleton Place are $189.2 million while its retail sales per household is $47,700, compared to $30,800 for Ontario and $32,500 for Canada. Carleton Place’s retail sales per capita in 2011 is $18,700 compared to $11,800 for Ontario and $13,000 for Canada. These statistics paint a healthy comparative picture of Carleton Place’s overall retail activity; obviously there is both the ability and opportunity to spend locally. However, Bridge Street (as detailed below) has a high current vacancy rate.

FPmarkets also estimates purchases by retail category, but such data is only available for Lanark County. The largest single expenditure category by far is estimated to be ‘new & used cars & recreational vehicles & parts’ followed by ‘home centres and hardware’, and ‘supermarkets’. Lanark County’s proportions of the Canadian total are fairly similar to that of other Counties such as Prescott & Russell and Renfrew (except for gas stations which appear to be much lower). Again, these are estimates for the County as a whole and not for Carleton Place specifically.

FPmarkets estimates for the years 2006 to 2011 suggest that some categories have experienced significant swings in demand over this period (i.e. new and used cars, recreational vehicles, etc.), while others have been fairly consistent (i.e. clothing, computers). A comparison of Lanark County’s total retail sales estimates between 2006-2011 with Ontario’s suggests both have experienced similar trends (except for between 2006 and 2007 and between 2009 and 2010).

A Residual Demand Analysis on the Carleton Place (trade area) retail market was developed. It estimates that:

o Trade area residents (that is, those in both Carleton Place and Beckwith Township) spent $268.7 million in 2010 at various retail and service stores, and that this spending is projected to increase by $47.9 million or 18% to $316.6 million in 2016.

o Spending of trade area residents supported a total of 621,716 to 840,356 sf of retail and service floor space in 2010. By 2013, this space is estimated to increase to a range of 672,019 to 908,462 sf.3

o Up to 158,164 sf of additional retail and service floor space would be supportable in this area by 2013 (90,058 sf of retail and service space is needed now with another 68,106 sf needed in the next 3 years, for a total of 158,164 sf).

2 Scotia Capital, Global Real Estate Trends, June 9, 2011. 3 Technically, in an analysis like this, the total figures refer to total supportable space within, as well as outside, the trade area.



An Existing Retail and Service Floor Space Inventory and Vacancy Profile was developed, based on field research and drive-bys. It estimates an overall Carleton Place retail and service space vacancy rate of 2% with vacancy rates ranging from 0% at the Hwy 7 big box area to 11% on Bridge Street. Total inventory is estimated to be 765,298 sf, with 15,000 sf currently vacant. Automotive and Home Improvement (AHIM) represents the largest share of inventory at 30%.

Industrial

Like the retail real estate market, the Canadian (and Ottawa) industrial real estate markets are relatively strong owing to little spec building and fairly limited supply.

Ottawa’s location, among other reasons, contributes to a relatively small inventory of industrial space. Not only is Ottawa within easy trucking distance from Montreal, it is being serviced by major industrial, warehousing, and logistics providers in Cornwall, Prescott, Brockville, etc. While there is certainly the opportunity for Carleton Place to play a larger role in serving Ottawa’s warehousing, industrial, outsourcing, and logistics needs (especially given the expanded Highway 7), there is also significant competition from current providers / built infrastructure in Cornwall and Prescott, both of which are located on the 401. Perhaps, Carleton Place would be better positioned as an industrial, outsourcing, warehousing, and logistics hub for the Ottawa Valley (both upper and lower).

There is little industrial real estate market data available on the Carleton Place and Lanark County markets. However, a review of various brokerage sites, suggests current asking rental rates in the $10-$11 per square foot range for Carleton Place industrial space. Discussions with a local developer of industrial buildings suggest a healthy market as the building is completely leased before completion.

In order to understand the typical users of industrial space, a review of the largest manufacturers in the comparator communities across Eastern Ontario was undertaken. Not surprisingly, many of the largest manufacturers are subsidiaries of foreign-based firms. This means that location and real estate decisions are not fully in the hands of local decision makers making these communities, including Carleton Place, particularly susceptible to plant closings and downsizings.

Carleton Place continues to benefit from its competitive locational advantages for industrial development, the most prominent being that it is situated west of Ottawa. Ottawa’s western suburbs have traditionally been its area of strongest industrial demand. It will continue to receive spill-over demand from Ottawa West due to cheaper land, lower rents, and (now) shorter commuting times and more local housing choice. The continued westward expansion of Stittsville and Kanata presents opportunities for the industrial (as well as retail) development of Carleton Place. It could also mean more competition for some in Carleton Place (a threat); although on the whole, this expansion is likely highly positive for Carleton Place.



Residential

Nationally, many analysts have forecasted that the housing market will slow and house prices could drop, but the market has been surprisingly resilient in 2011. Housing market stability is critical to the health of retail sales and needs to be monitored carefully in the coming months.

Housing starts in Carleton Place typically range between 60 and 80 units a year; while Lanark County typically experiences the second highest number of starts of all OMATO municipalities (usually a distant second to Prescott & Russell).

The federal government’s purchase of the 2.2 million square foot former Nortel campus is expected to result in more housing starts in rural areas surrounding West Ottawa, just as rural areas around Orleans and East Ottawa have historically benefited from a high concentration of federal government jobs (such as from RCMP, DND, NRC, and CMHC in various East Ottawa areas).



1.0 Introduction This document serves as a situation analysis designed to inform current industrial and retail strategy development activities of the Town of Carleton Place. In addition to assessing and updating previous data collected by the Town, it provides additional analyses which serve to inform current activities. In order to ensure that current industrial and retail strategy development takes place with an understanding of Carleton Place’s competitive positioning (and within the current economic context), this situation analysis compares the Town (and Beckwith Township) with neighbouring towns such as Arnprior, Perth, and Mississippi Mills. In addition, comparisons are made to other towns which, like Carleton Place, can be considered part of the Ottawa commuter shed, such as Kemptville, and Casselman. Most of the communities selected are similar in size to Carleton Place, with the exception of the villages of Casselman and Merrickville which are much smaller. Nevertheless, they have been included because, like Carleton Place, they both have significant commuters to Ottawa. Due to data limitations, it was not possible to develop comparisons to all these communities in all cases, but in the case of the demographics analysis which follows next, this was possible due to available Statistics Canada Census data. It should be noted that Kemptville has undergone an amalgamation/dissolution as per Statistics Canada data collection and is now part of North Grenville Township, which is the name and grouping which will be used in the following tables. Essentially, North Grenville Township is being used as an approximate proxy for Kemptville.4

4 While Kemptville is the largest community in North Grenville, the municipality also includes the small communities of Actons Corners, Bishop's Mills, East Oxford, Heckston, Hutchins Corners, Millars Corners, Newmanville, Oxford Mills, Oxford Station, Pattersons Corners, Peltons Corner, Sabourins Crossing, Schipaville, Swan Crossing, and Van Allens.



2.0 Demographics This section draws heavily from available Statistics Canada data from the last two censuses, 2001 and 2006. In order to assess trends since 2006, 2011 estimates developed by FPmarkets have been added where they are available.5 FPmarkets develops annual estimates for many data sets tracked by Statistics Canada by its Census every four years. 2.1 Population Figure 1 provides historical population trends. Between 2001 and 2006, both Carleton Place (the town) and Beckwith (the township) experienced fairly good population growth in comparison to the others; however, both grew slower than Ontario as a whole. Also, CP is growing slower than neighbouring Beckwith Township. Beckwith’s growth rate of 5.6% between 2001 and 2006 compares to 6.7% for Drummond & North Elmsley Township, 8.0% for Lanark Highlands Township, but it is higher than Montague Township (-2.1%). We note that local population growth is a basic driver of residential and retail development. Also driving this development is the ability of a community to attract short-term visits to the area, or its catchment ability.

Figure 1: Population Trends

Carleton Place, T

Beckwith, TP Arnprior, T Casselman,VL North

Grenville, TP Merrickville-Wolford, VL

Mississippi Mills Perth, T Smiths

Falls, T Renfrew, T Ontario

% Change, 1996-2001 7.1% 10.7% 1.1% 1.1% n/a 6.9% 5.2% 1.7% 0.1% -2.3% 6.1% Population, 2001 9,083 6,046 7,192 2,910 13,581 2,812 11,647 6,003 9,140 7,942 11,410,046 Population, 2006 9,453 6,387 7,158 3,294 14,198 2,867 11,734 5,907 8,777 7,846 12,160,282 % Change, 2001-2006 4.1% 5.6% -0.5% 13.2% 4.5% 2.0% 0.7 -1.6% -4.0% -1.2% 6.6% Population, 2011 Estimate by FPmarkets

10,102 6,931 7,277 n/a n/a n/a 12,132 5,965 8,781 7,915 13,415,750

% Change, 2006-2011 6.9% 8.5% 1.7% n/a n/a n/a 3.4% 1.0% 0.0% 0.9% 10.3%

If estimates by FPmarkets are correct, population growth during the period 2006 and 2011 appears to be stronger for all communities than in the 2001-2006 period. Figure 2 compares the growth rates for the three periods for each community and the province as a whole.

5 FPmarkets - Canadian Demographics 2011.



Figure 2: Population Growth Rates for 1996-2001, 2001-2006, and 2006-2011

2.2 Unemployment Rate Figure 3 provides historical unemployment rates.6 In both 2001 and 2006, Carleton Place (the town) had an unemployment rate (for both sexes) higher than the Ontario average but Beckwith (the township) had rates significantly lower than Ontario’s. However, Beckwith’s unemployment rate seems to be on an upward trend whereas Carleton Place’s appears to be going down. Based on this figure, it can be concluded that those communities with significant industrial and/or manufacturing activity tend to have higher unemployment rates than those communities without such activities. Interestingly, the unemployment rate is relatively uniform in the 7% range for industrial centres in this part of Ontario, which is slightly higher than the Ontario overall average. This suggests that most Eastern Ontario towns are been universally impacted by plant closings and downsizings.

6 Based on Statistics Canada 2001 and 2006 Census data only; the 2006 unemployment rate refers to the unemployed expressed as a percentage of the labour force in the week (Sunday to Saturday) prior to Census Day (May 16, 2006).

-5%

0%

5%

10%

15%

20%

1996-2001 2001-2006 2006-2011

Carleton Place

Beckwith, TP

Arnprior

Casselman, V

Merrickville-Wolford, VLMississippi MillsPerth

Smiths Falls

Renfrew

Ontario



Figure 3: Unemployment Trends

Carleton Place, T

Beckwith, TP Arnprior, T Casselman,VL

North Grenville,

TP

Merrickville-Wolford, VL



Both Sexes – Unemployment Rate, 2001

7.3% 3.2% 7.2% 1.3% 4.5% 3.9% 4.1% 5.8% 7.3% 7.2% 6.1%

Both Sexes – Unemployment Rate, 2006

6.7% 5.8% 6.1% 4.0% 4.6% 3.7% 5.8% 7.2% 9.8% 6.5% 6.4%

2.3 Average Value of Dwelling Figure 4 provides average value of private dwelling data for 2001 and 2006.7 Every community experienced significant appreciation in the average price of private dwelling with Merrickville-Wolford VL, Carleton Place, and Beckwith TP experiencing the greatest percentage growth.

Figure 4: Dwelling Value Trends

Carleton Place, T





Average Value of Dwelling $, 2001 125,996 163,276 133,862 133,684 155,719 130,247 162,480 139,364 105,873 98,126 199,884

Average Value of Dwelling $, 2006 202,484 257,281 189,914 192,103 236,060 210,849 243,678 211,589 154,073 142,291 297,479

% Change, 2001-2006 60.7% 57.6% 41.9% 43.7% 51.6% 61.9% 50.0% 51.8% 45.5% 45.0% 48.8%

Dwellings Owned Figure 5 provides data on the total number of private dwellings owned. This is based on the total number of occupied private dwellings (housing tenure) as defined by Statistics Canada.8 It indicates that between 2001 and 2006, Casselman was the only municipality that exceeded the Ontario average of 13%. In fact, the total number of dwellings owned increased by an impressive 23%,

7 Refers to a private dwelling which is owned or being purchased by some member of the household. A dwelling is classified as 'owned' even if it is not fully paid for, such as one which has a mortgage or some other claim on it. 'Value of dwelling' refers to the dollar amount expected by the owner if the dwelling were to be sold. 8 Refers to a private dwelling which is owned or being purchased by some member of the household. A dwelling is classified as 'owned' even if it is not fully paid for, such as one which has a mortgage or some other claim on it.



likely due to strong home building activity in the village, owing to its increasing role as a commuter community to both East Ottawa and Hawkesbury. Compared to other communities in this analysis, both Carleton Place and Beckwith are experiencing higher growth rates in the number of dwellings owned. Much in the same way that Casselman serves (at least in part) as a cheaper alternative for housing to those computing into East Ottawa, the same can be said for Carleton Place and Beckwith, where housing is significantly cheaper than in Kanata or Stittsville.

Figure 5: Dwellings Owned Trends

Carleton Place, T





Dwellings Owned, 2001 2,415 2,015 1,785 705 4,115 905 3,535 1,640 2,175 2,180 2,862,300 Dwellings Owned, 2006 2,690 2,195 1,970 905 4,600 925 3,800 1,700 2,260 2,280 3,235,495 % Change, 2001-2006 11.4% 8.9% 10.4% 28.4% 11.8% 2.2% 7.5% 3.7% 3.9% 4.6% 13.0% Dwellings Owned, 2011 Estimate by FPmarkets

2,889 2,369 2,037 n/a n/a n/a 3,991 1,764 2,398 2,336 3,677,006

% Change, 2006-2011 7.4% 7.9% 3.4% n/a n/a n/a 5.0% 3.8% 6.1% 2.5% 13.6%

Dwellings Rented Figure 6 provides data on the total number of private dwellings rented. As expected, most of these communities are experiencing negative growth in rented dwellings. This is due to limited supply and, more importantly, to historically low interest rates which encourage home ownership.



Figure 6: Dwellings Rented Trends

Carleton Place, T





Dwellings Rented, 2001 1,020 135 1,245 385 785 160 695 1,170 1,720 1,280 1,351,365 Dwellings Rented, 2006 1,005 100 1,185 340 640 185 570 1,200 1,550 1,265 1,312,295 % Change, 2001-2006 -1.5% -35.0% -5.1% -13.2% -22.7% 13.5% -21.9% 2.5% -11.0% -1.2% -3.0% Dwellings Rented, 2011 Estimate by FPmarkets

1,080 114 1,216 n/a n/a n/a 583 1,237 1,642 1,301 1,445,496

% Change, 2006-2011 7.5% 14.0% 2.6% n/a n/a n/a 2.3% 3.1% 5.9% 2.8% 10.2%

2.4 Households Figure 7 provides data on the total number of private households. Household formation growth in Carleton Place and Beckwith are reflective of the Ontario average and higher than in most of the other communities under investigation. Trends in household formation go hand-in-hand with growth in residential construction and dwelling trends; thus the same communities will be strong in both. Growth in household formation is an important prerequisite for subsequent retail development.



Figure 7: Household Formation Trends

Carleton

Place, T Beckwith,

TP Arnprior, T Casselman,VL North Grenville, TP


Mississippi Mills, T Perth, T Smiths


Total Number of Private Households, 2001

3,435 2,150 3,030 1,095 4,905 1,060 4,235 2,810 3,895 3,460 4,219,410

Total Number of Private Households, 2006

3,700 2,295 3,160 1,245 5,240 1,115 4,375 2,905 3,815 3,550 4,554,250

% Change, 2001-2006 7.7% 6.7% 4.3% 13.7% 6.8% 5.2% 3.3% 3.4% -2.1% 2.6% 7.9% Total Number of Private Households, 2011 Estimate by FPmarkets

3,969 2,483 3,253 n/a n/a n/a 4,574 3,001 4,040 3,637 5,130,051

% Change, 2006-2011 7.3% 8.2% 2.9% n/a n/a n/a 4.5% 3.3% 5.9% 2.5% 12.6%



2.5 Income In this section, we present various income comparisons such as personal income, household income, and the composition of income by community. 2.5.1 Median Personal Income Figure 8 provides trends in median income based on all population (male and female combined) 15 years and over in 2005.9

Figure 8: Personal Median Income Trends

Carleton Place, T





Median Income $, 2000 24,759 32,078 21,749 28,002 27,157 26,106 29,133 22,829 19,500 19,404 24,816

Median Income $, 2005 27,248 34,006 25,321 31,716 31,799 28,561 29,585 23,787 22,082 22,671 27,258

% Change, 2000-2005 10.1% 6.0% 16.4% 13.3% 17.1% 9.4% 1.6% 4.2% 13.2% 16.8% 9.8%

2.5.2 Average Personal Income Figure 9 provides trends in average income based on all population 15 years and over in 2005.10 Merrickville and Carleton Place experienced the largest percentage growth in average personal income between 2000 and 2005, both significantly higher than the Ontario growth rate. Perhaps, in the case of these two communities they have a significant portion of residents that commute to Ottawa where salaries are much higher. And, perhaps, both communities have attracted retirees from Ottawa, or those who have cashed-out of expensive Ottawa real estate and can now afford to live rurally.

9 Note that Statistics Canada’s 2006 Census used 2005 for its various income data. Likewise, the 2001 Census used 2000 income data. Refers to persons who do have income. 10 See Note immediately above.



Figure 9: Personal Average Income Trends

Carleton

Place, T Beckwith,

TP Arnprior, T Casselman,VL North Grenville, TP




Average Income $, 2000 29,361 38,757 30,884 34,122 34,301 29,201 35,625 28,064 25,753 26,123 35,185

Average Income $, 2005 35,503 39,680 30,985 38,798 n/a 35,604 39,947 30,263 28,096 28,408 38,099

% Change, 2000-2005 20.9% 2.4% 0.3% 13.7% n/a 21.9% 12.1% 7.8% 9.1% 8.7% 8.3%

2.5.3 Median Household Income Figure 10 provides trends in median household income (based on Statistics Canada data for the total number of private households). Median household income increased in every community between 2000 and 2005, except for Merrickville-Wolford. Casselman village experienced the largest percentage growth in median household income; Beckwith’s percentage change (12.8%) was essentially the same as the Province’s (12.7%) over the same period.

Figure 10: Median Household Income Trends

Carleton Place, T





Median Household Income $, 2000

50,204 68,712 42,381 52,851 58,727 56,036 60,499 40,104 38,974 34,350 53,626

Median Household Income $, 2005

55,077 77,515 46,436 69,771 69,187 54,036 67,114 42,168 42,446 39,511 60,455

% Change, 2000-2005 9.7% 12.8% 9.6% 32.0% 17.8% -3.6% 10.9% 5.1% 8.9% 15.0% 12.7%



2.5.4 Average Household Income Figure 11 provides trends in average household income (based on Statistics Canada data for the total number of private households in 2000 and 2005).

Figure 11: Average Household Income Trends

Carleton Place, T





Average Household Income $, 2005

67,579 83,700 55,555 75,995 n/a 68,721 82,153 51,389 49,968 49,616 77,967

2.5.5 Composition of Total Income, 2005 Figure 12 provides a composition of total income in 2005 by community. Residents of Casselman and Beckwith generate the highest proportion of their total income from employment. The largest proportion of total income coming from government transfer payments is in Perth, Renfrew, and Smiths Falls. The proportions identified for Carleton Place as part of the 2006 Census (which were based on 2005 income) are essentially identical to those from the 2001 Census (which were based on 2000 income).

Figure 12: Composition of Total Income, 2005

Carleton Place, T





Composition of Total Income in 2005 %

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Employment Income % 75.2 80.2 68.5 82.9 77.9 69.5 76.1 51.9 63.1 64.1 77.4

Government Transfer Payments %

11.8 7.6 16.2 8.6 9.4 11.9 8.8 20.1 18.6 19.2 9.8

Other % 13.1 12.3 15.2 8.6 12.7 18.5 15.0 28.0 18.3 16.7 12.9



2.5.6 Income Status, 2005 Figure 13 shows the prevalence of low income after tax in 2005 (based on total population in private households for income status). These proportions were greatest in Smiths Falls and Perth followed by Arnprior and Renfrew. Both Carleton Place and Beckwith were below the Ontario average of 11.1%, with Beckwith (3.4%) significantly below.

Figure 13: Income Status, 2005

Carleton Place, T





Prevalence of Low Income After Tax in 2005 %

7.7% 3.4% 8.5% 2.2% 4.5% 3.7% 4.5% 9.0% 11.7% 8.2% 11.1%

2.6 Commuters In this section, we access commuting trends between Ottawa and municipalities in Ontario that are adjacent to Ottawa (referred to as Ontario Municipalities Adjacent to Ottawa – OMATO). In 2006, about 27,350 people lived in OMATO municipalities and worked in Ottawa representing 39% of the entire OMATO employed workforce, down slightly from 2001 (when 40% of the OMATO workforce worked in Ottawa).11 In the case of both Carleton Place and Beckwith Township, the proportion of the labour force working in Ottawa decreased between 2001 and 2006, as was the case for most OMATO municipalities. Only in North Dundas (+5%), The Nation (+2%), Montague (+4%), McNab/Braeside (+3%), and Arnprior (+1%) did the proportion of the labour force working in Ottawa increase between 2001 and 2006. Figure 14 shows clearly that there are more commuters from the east than from the west or south. More than half of the commuters from OMATO to Ottawa came from municipalities in Prescott and Russell, where 45% of the labour force, about 14,000 people, worked in Ottawa. The western municipalities in Lanark and Renfrew Counties accounted for about 30% of commuters and the remaining 20% came from Stormont, Dundas and Glengarry, and Leeds and Grenville. A take-away from this analysis is that there is significant opportunity for Carleton Place (and area) to gain a larger share of commuters to Ottawa, especially given the new highway and the diversification of federal government jobs out of East Ottawa and

11 City of Ottawa Annual Development Report 2010 (released September 2011).



downtown, as the federal government continues to take advantage of space vacated by the technology sector at several sites throughout West and South Ottawa.

Figure 14: OMATO Labour Force Employed in Ottawa, 2001 and 2006

Total Employed Labour Force

2001

Employed in Ottawa 2001

Percentage of Labour Force Employed in Ottawa 2001

Total Employed Labour Force

2006

Employed in Ottawa 2006

Percentage of Labour Force Employed in Ottawa 2006

Prescott & Russell 29,165 13,540 46.4% 31,235 13,940 44.6% Clarence-Rockland,C 10,730 5,790 54.0% 11,340 6,035 53.2% Russell, TP 6,875 3,840 55.9% 7,650 3,990 52.2% The Nation Municipality, TP 5,890 2,020 34.3% 6,090 2,215 36.4% Alfred-Plantagenet, TP 4,095 1,225 29.9% 4,350 1,145 26.3% Casselman, Vlg 1,575 665 42.2% 1,805 555 30.7% Stormont, Dundas & Glengarry 5,815 1,785 30.7% 5,930 2,080 35.1% North Dundas, TP 5,815 1,785 30.7% 5,930 2,080 35.1% Leeds & Grenville 8,255 3,050 36.9% 9,035 3,340 37.0% North Grenville, TP 6,885 2,790 40.5% 7,590 3,080 40.6% Merrickville-Wolford, Vlg 1,370 260 19.0% 1,445 260 18.0% Lanark 15,445 6,425 41.6% 16,085 6,210 38.6% Mississippi Mills, Tn 6,035 2,425 40.2% 6,275 2,330 37.1% Carleton Place, Tn 4,465 2,050 45.9% 4,645 1,865 40.2% Beckwith, TP 3,330 1,645 49.4% 3,545 1,650 46.5% Montague, TP 1,615 305 18.9% 1,620 365 22.5% Renfrew 6,795 1,500 22.1% 7,285 1,780 24.4% McNab-Braeside,TP 3,560 710 19.9% 3,900 915 23.5% Arnprior, Tn 3,235 790 24.4% 3,385 865 25.6% OMATO Total 65,475 26,300 40.2% 69,570 27,350 39.3%



2.7 Migration Figure 15 presents migration between Ottawa and adjacent municipalities between 2004 and 2009.12 While data is not available for Carleton Place, Lanark County as a whole had 4,983 people migrate from the county to Ottawa with 6,205 people moving from Ottawa to Lanark. Thus, from Ottawa’s perspective it experienced negative net migration with Lanark County of 1,222 people during this period. From Lanark County’s perspective, it gained 1,222 people because more people moved from Ottawa to Lanark County then left from Lanark to go to Ottawa. The figure indicates that most counties around Ottawa are attracting slightly more people from Ottawa then are moving to it, at least between 2004 and 2009.

Figure 15: Migration between Ottawa and Adjacent Municipalities Municipality 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Total 2004-2009Lanark to Ottawa 983 904 997 1,088 1,011 4,983 Ottawa to Lanark 1,445 1,197 1,221 1,203 1,139 6,205 Lanark Net Migration -462 -293 -224 -115 -128 -1,222 Leeds-Grenville to Ottawa 779 843 875 817 898 4,212 Ottawa to Leeds-Grenville 1,114 1,012 1,071 1,088 942 5,227 Leeds-Grenville Net Migration -335 -169 -196 -271 -44 -1,015 Prescott-Russell to Ottawa 1,755 1,701 1,741 1,801 1,761 8,759 Ottawa to Prescott-Russell 1,907 1,836 1,784 1,791 1,668 8,986 Prescott-Russell Net Migration -152 -135 -43 10 93 -227 Renfrew to Ottawa 1,017 964 908 1,021 1,127 5,037 Ottawa to Renfrew 1,025 1,045 1,076 960 820 4,926 Renfrew Net Migration -8 -81 -168 61 307 111

12 Statistics Canada Migration Estimates for Census Division.



3.0 Retail Markets In this section, we begin with an overview of current and future Canadian retail market trends. We end this section with retail sales estimates and a retail floor space analysis for the Carleton Place trade area. 3.1 Current Retail Landscape in Canada Perhaps the single most prominent retail trend in recent years is the continued expansion of U.S. retailers in Canada. Strong Canadian retail sales and healthy retail property markets over several years have attracted the attention of foreign retailers/developers. They are impressed with Canada’s relatively steady sales growth, higher average sales per square foot, and lower density of shopping space per capita.13 For example, a recent Colliers study indicated that shopping centre sales average $580 per square foot in Canada (compared to $309 in the US).14 Some Canadian malls, such as Yorkdale Mall in Toronto, bring in more than $1,200 a square foot; the only mall to bring in more is the Forum Shops at Caesars Palace in Las Vegas with $1,400 a square foot. For comparisons closer to home, Place d’Orleans shopping centre in Orleans has a CRU sales psf of $429. The Rideau Centre has experienced excellent sales performance recently with an improvement in commercial retail unit (CRU) sales from $860 per square foot (psf) in 2009 to $930 psf in 2010.15 Canada has 39% less mall space per capita than the U.S. There are many reasons for this such as the shortage of available land, the restrictions that many Canadian cities put on commercial space, and even the stringent demands of provincial highways ministries. Chain stores continue to increase their share of the Canadian market at the expense of non-chain stores (increasing from 39% market share in 1999 to 47% in 2008).16 While both chain and non-chain stores are growing their operating revenues, it is the faster growth rate of chain stores that is increasing their market share.17 Chain stores in the area of home electronics, appliances, home furnishings, and clothing had some of the strongest market share growth between 2002 and 2008.18

13 Scotia Capital, Global Real Estate Trends, June 9, 2011. 14 Ibid, Page 2. 15 Source: DBRS Limited. 16 State of Retail, The Canadian Report 2010, Retail Council of Canada, Page 6. Industry Canada is identified as the source institution. 17 Ibid. 18 Ibid.



The influx of American and European retailers means that Canadian retail markets have undergone significant changes in recent years. For example, Canadian landlords have been approving budgets to expand and renovate current space in order to accommodate these new retailers, and in many cases, to attract them. There is increasing interest from U.S. firms which is providing Canadian firms with opportunities to joint venture with US developers (current examples include RioCan & Tanger / SmartCentres and Calloway).19 The development of upscale outlet malls (which have been very common in the U.S. for many years) is starting to take hold in Canada. Prime Outlet Malls in the U.S. are hugely successful and they appear to be coming to Canada. These malls contain discount outlets for major luxury brands such as Coach, Michael Koors, Kenneth Cole, Talbots, Perry Ellis, Nike, Lulumon, and Off 5th Saks – a bargain-priced spinoff of Saks 5th Avenue. These outlet malls are common places for many Canadian snowbirds and vacationers to shop at in places like Florida, Georgia, and the Carolinas. Now all Canadians will be able to enjoy the discount outlet experience – but the question remains whether the pricing will be as good as in the U.S. Colliers notes the opportunity to develop “shadow anchor” centres that draw off of nearby major anchored centres.20 This maybe applicable to Carleton Place as a means of linking older retail centres to the newer big box outlets on Highway 7. Population and income growth are the primary determinants of demand for retail goods and services and thus retail space requirements. Despite growing uncertainty in these areas, Canadian and Ottawa retail market fundamentals remain solid with tight vacancy rates and rising demand and rents. Nationally, retail sales are sluggish. On a monthly basis, retail sales averaged 0.35% growth in 2010 but sales so far in 2011 have averaged only 0.12% growth per month.21 Wages were only up 2.0% (y/y) nationally in June while the Total Consumer Price Index rose 3.1% (y/y) in the same month.22 In Ottawa, the federal government’s departmental spending freeze will restrict growth in the region’s public sector. Employment in public administration is expected to fall by an average of 2.2% annually both this year and next—a total of about 7,000 job losses. This is likely to negatively impact retail development in Ottawa going forward. In Ottawa, there have been 20 retail real estate transactions (over $500,000) in the first half of 2011 for a total value of $28.5 million compared to 22 transactions in the first half of 2010 for a total value of $38.7 million.23

19 The Retail Report Canada Spring 2011 Edition Colliers International. 20 Ibid. 21 CB Richard Ellis Canadian Retail MarketView, Mid-Year 2011. 22 Ibid. 23 Based on data from the Juteau Johnson Cumba website from RealTrack, Inc.



In terms of construction activity, a 430,000 square foot Ikea store is currently under construction at Pinecrest Road while RioCan’s 393,000 square foot development on Hazeldean Road in Kanata continues. CB Richard Ellis notes that several national franchises are likely to expand into Ottawa in 2011.24 Three of Ottawa’s five regional shopping centres have plans to add space (Bayshore, Rideau Centre, and St. Laurent). Retail sales in the Ottawa region shrunk by only 1.1%, from $14.86 billion in 2008 to $14.70 billion in 2009, relative to the national slowdown of 3.5%. The Conference Board of Canada estimates that Ottawa’s 2011 retail sales will increase by 5.1% (y/y).25 Thus, the region continues to be one of Canada's largest and strongest consumer markets. Ottawa is expected to get its first real outlet mall soon with RioCan expected to break ground first.26 The mall will house outlets which generally feature product overruns, previous season merchandise, or product for discount. Given the amount of cross-border shopping by Ottawa area residents in Syracuse and Watertown, there is likely strong pent-up demand for real outlet shopping in the Ottawa area. Figure 16 presents data on the Ottawa retail space market.27 It shows that the supply of power centre retail space is growing the fastest and enjoys the lowest vacancy rate along with regional shopping centres.

Figure 16: Ottawa Retail Space Overview Total Space, 2009 Total Space, 2010 Vacancy Rate

Format Sq. Ft. Share Sq. Ft. Share 2009 2010Power Centres 7,696,000 24.2% 8,530,304 25.6% 0.7% 0.8% Other* 4,937,000 15.5% 5,093,559 15.3% n/a n/a Traditional Main Streets 4,764,000 15.0% 4,794,495 14.4% n/a n/a Regional SC 3,765,000 11.8% 3,765,000 11.3% 0.7% 0.8% Community SC 3,709,000 11.6% 4,068,213 12.2% 2.5% 2.7% Neighbourhood SC 4,174,000 13.1% 4,274,524 12.8% 5.4% 4.4% Mini-Plazas 2,332,000 7.3% 2,332,226 7.0% 5.4% 4.4% Office Concourses 474,000 1.5% 474,000 1.4% n/a n/a Total 31,851,000 100% 33,332,321 100% 3.1% 2.7%

* Other includes: In areas inside the Greenbelt, stretches of retail space along streets that are designated Arterial Mainstreet in the Official Plan (including Carling, Merivale south of Baseline, Bank south of the Rideau River, Montreal Road east of St. Laurent, and St. Laurent Blvd) as well as standalone retail outlets that are not part of power centres or shopping centres and may or may not be on Main Streets).

24 CB Richard Ellis Ottawa 2011 Market Outlook. 25 Ibid. 26 According to Jeff Ross, RioCan Senior Vice-President of Leasing. 27 City of Ottawa and Cushman & Wakefield Ottawa Retail Report Q4-2010.



3.2 Future Trends and Forecasts While there is growing uncertainty as to where the Canadian economy and in turn retail sales growth is headed, market fundamentals continue to be strong and much better than in the United States. Going forward, several analysts expect that some established Canadian retailers will disappear as US-based retailers seek easy and quick Canadian market entry through outright acquisition rather than by store-by-store expansion. U.S-based discount retailer Big Lots recently purchased Liquidation World locations in order to enter the Canadian market. U.S. retailer interest in Canada is expected to continue - in part because, for many US retailers, Canada represents the largest, closest, and most similar, market to the US. Thus, while the growth of the invasion may be debatable, it is likely to continue. Target acquired 220 Zellers stores; this is expected to impact several Canadian markets for some time to come.28 For example, among the first set of Zellers stores to be converted will be the former Zellers store at the County Fair Mall in Smiths Falls. It is expected that a typical Target store will draw up to 50% more traffic than a Zellers store. Major US retailers confirmed or believed to be interested in Canada include Express, Marshall’s, JC Penny, Nordstrom, Topshop, J. Crew, Kohl’s, and Dick’s Sporting Goods.29 U.S.-based Whole Foods, which has a location in Toronto, is expected to continue to expand throughout Ontario including a store at the redeveloped Lansdowne Park complex in Ottawa. This high-end food retailer is known for its environmental and ethical claims and high prices. Due to the influx of foreign retailers, we should expect many current retail malls and power centres to be expanded, renovated, and generally made more retail-intensive. In terms of the premium outlet trend mentioned earlier, we note that many of these developments have historically occurred in prime spots in smaller communities near major cities rather than in the city itself; due to large land requirements and the cheaper cost of land and lower taxes. Scotia Capital notes several cautionary trends which may (increasing) impact retail going forward - discretionary retail spending had weakened sharply in 2011, higher gas prices, heavy household debt levels, more caution towards borrowing, housing activity softening, etc.30 In order to provide information as to which retail chains are currently expanding in Canada, Appendix A lists the top retail chains based strictly on an increase in the number of locations over the last year. The data is based on the annual survey of the Directory of

28 Kroger, Walgreen, and CVS are the only top 10 U.S. retailers who will not be in Canada shortly. 29 Ibid, Page 3. 30 Scotia Capital, Global Real Estate Trends, June 9, 2011.



Retail Chains in Canada.31 Chains which are expanding the number of stores most are Rogers Plus followed by The Source, Shell, Remedy’sRX, RONA, and Snap Fitness. Appendix B lists the top retail chains based strictly on the projected number of openings.32 In Ottawa, CB Richard Ellis projects that 893,500 square feet of new retail space will be added to the market in the second half of 2011 with an additional 805,000 square feet to be added during 2012.33 3.3 Retail Data Analysis on the Competitive Communities Figure 17 presents total retail sales estimates for the same comparative communities assessed in the demographics analysis in Section 2. While Statistics Canada is the primary source of retail sales data in Canada, it does not publish data at the municipal level (except for Montreal, Toronto, and Vancouver). FPmarkets is a primary source for retail sales estimates at the municipal level; unfortunately, they only publish data for Carleton Place and Mississippi Mills, as shown in the figure below.

Figure 17: 2011 Retail Sales Estimates for the Comparator Communities

Carleton Place, T

Beckwith, TP Arnprior, T Casselman,VL Kemptville Merrickville-

Wolford, VL Mississippi

Mills Perth, T Smiths Falls, T Renfrew, T

Total Retail Sales $M Estimate by FPmarkets, 2011

$189.2 M n/a n/a n/a n/a n/a $106.9 M n/a n/a n/a

% of CDN Total Retail Sales 0.04% n/a n/a n/a n/a n/a 0.02% n/a n/a n/a

Figure 18 shows available FPmarkets data on estimated retail sales per household and per capita for Carleton Place and Mississippi Mills, as well as comparisons to Lanark County, Ottawa, Ontario, and Canada. It should be noted that the FPmarkets estimate of $189.2 million is for Carleton Place, the town only. As will be seen in Section 3.4, we have conducted our own retail analysis on the combined trade area of Carleton Place and Beckwith Township, and have estimated a total spend of $268 million for this trade area (see Figure 26). Likewise, FPmarkets estimate of per capita retail sales of $18,700 is for Carleton Place only (which is not the same as that for the trade area).

31 Source: 2011 Directory of Retail Chains in Canada, A Monday Report on Retailers Publication, Section D. 32 Ibid. 33 CB Richard Ellis Canadian Retail MarketView, Mid-Year 2011.



Figure 18: Retail Sales Per Household and Per Capita Comparisons

Retail Sales, 2011 Carleton Place, T Mississippi Mills Lanark County Ottawa, CMA Ontario Canada Total Retail Sales $M Estimate by FPmarkets, 2011

$189.2 M $106.9 M $1,038.0 M $10,004.0 M $157,994.3 M $448,211.6 M

% of CDN Total Retail Sales 0.04% 0.02% 0.23% 2.23% 35.25% 100%

Retail Sales Per Household, $ $47,700 $23,400 $38,400 $27,500 $30,800 $32,500

Retail Sales Per Capita, $ $18,700 $8,800 $15,500 $11,100 $11,800 $13,000 Carleton Place’s retail sales per household and per capita are higher than the Ontario and Canadian averages; this means that both the ability and the opportunity to shop locally in Carleton Place is stronger than average. FPmarkets also estimates purchases by retail category, but such data is only available at the County level. Figure 19 provides 2011 retail estimates by category for Lanark, Prescott & Russell, and Renfrew Counties.

Figure 19: 2011 Retail Sales Estimates By Category Lanark County Prescott & Russell Renfrew In $ Millions % of Cdn. % of Cdn. Total % of Cdn. Total

Total: 1,038.0 0.23 0.26 0.31New & Used Cars & Recreational Vehicles & Parts 283.3 0.30 0.30 0.34

Gas Stations 89.0 0.17 0.41 0.43 Furniture 11.3 0.11 0.11 0.18 Home Furnishings 7.0 0.12 0.11 0.40 Computer and Software 0.8 0.06 0.09 0.09 Home Electronics and Appliances 14.0 0.11 0.12 0.18 Home Centres and Hardware 156.7 0.55 0.63 0.43 Supermarkets 150.8 0.20 0.22 0.26 Convenience and Speciality Foods 20.5 0.19 0.26 0.22 Beer, Wine, Liquor 37.0 0.19 0.16 0.25 Pharmacies, Personal Care 75.1 0.22 0.14 0.25 Clothing 13.7 0.07 0.07 0.15 Shoe, Clothing Accessories and Jewellery 2.7 0.05 0.09 0.15 General Merchandise 127.5 0.23 0.23 0.40 Sporting Hobby Music Books 18.6 0.16 0.07 0.20 Miscellaneous 30.2 0.25 0.16 0.25



Figure 20 provides historical retail sales by category for Lanark County. These are estimates developed each year by FPmarkets based on Statistics Canada data.

Figure 20: Lanark County Retail Sales Estimates By Category, 2006-2011

Figure 21 is a graphical representation of the same data in Figure 20. It shows that some categories have experienced significant swings in demand (i.e. new and used cars, recreational vehicles, etc.), while others have been fairly consistent (i.e. clothing, computers) over the 2006-2011 period.

Lanark County2006 2007 2008 2009 2010 2011

Total Retail Sales - Lanark County (Est.) 971.7 950.0 972.3 887.1 977.4 1,038.0New & Used Cars Rec. Vehicles, Parts 326.4 292.8 242.8 208.8 203.2 283.3

Gas Stations 67.6 76.0 103.1 79.1 91.9 89.0

Furniture 10.4 11.2 11.9 9.2 10.9 11.3

Home Furnishings 14.9 9.9 6.7 7.5 5.3 7.0Computer & Software 1.6 1.3 1.1 0.8 0.9 0.8

Home Electronics & Appliances 20.7 16.8 26.1 16.5 12.3 14.0

Home Centres, Hardware, etc. 79.4 128.1 98.1 101.4 172.1 156.7

Supermarkets 182.9 160.8 138.3 130.9 156.4 150.8

Convenience & Specialty Foods 29.6 20.8 31.7 32.8 32.0 20.5

Beer, Wine, Liquor 33.8 31.4 30.7 30.7 32.5 37.0

Pharmacies. Personal Care 46.7 42.9 138.0 92.6 71.1 75.1

Clothing 17.0 15.9 13.9 13.0 14.0 13.7

Shoe, Cloth. Access. & Jewellery 5.0 3.5 3.9 3.1 2.4 2.7

General Merchandise 93.8 102.8 80.2 112.7 119.6 127.5

Sporting, Hobby, Music & Book 18.6 16.4 19.4 19.9 24.4 18.6

Miscellaneous 23.4 19.4 26.3 28.0 28.5 30.2



Figure 21: Lanark County Retail Sales By Category, 2006-2011 (Graphical)

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011

New & Used Cars Rec. Vehicles, PartsGas Stations

Furniture

Home Furnishings

Computer & Software

Home Electronics & Appliances

Home Centres, Hardware, etc.

Supermarkets

Convenience & Specialty Foods

Beer, Wine, Liquor

Pharmacies. Personal Care

Clothing

Shoe, Cloth. Access. & Jewellery

General Merchandise

Sporting, Hobby, Music & Book

Miscellaneous



Figure 22 compares the estimated total retail sales for Lanark County to Ontario as a whole, over the period 2006-2011 (based on estimates developed by FPmarkets). For the most part, retail sales trends are comparable between Lanark County and Ontario, with some exceptions (i.e. between 2006 and 2007, and between 2009 and 2010).

Figure 22: Historical Retail Sales Estimates, Lanark County & Ontario

800

850

900

950

1000

1050

2006 2007 2008 2009 2010 2011

Total Retail Sales (in $M) - Lanark County (Estimates)

Total Retail Sales - Lanark County

140000

142000

144000

146000

148000

150000

152000

154000

156000

158000

160000

2006 2007 2008 2009 2010 2011

Total Retail Sales (in $M) - Ontario (Estimates)

Total Retail Sales - Ontario



3.4 Residual Demand Analysis on Carleton Place Retail Market This section provides an update to the 2007 Residual Demand Analysis (RDA) that was conducted on Carleton Place’s retail market. RDA is a technique that uses income, expenditure, and sales statistics to identify the extent to which an area’s retail and service needs are being met. The outcome is an estimate of residual (i.e., excess or unmet) demand. 3.4.1 Per Capita Expenditures The foundation step of the analysis is to use Ontario annual per capita expenditures to develop a retail demand analysis on Carleton Place. As we stated in the proceeding section, income is considered the most influential factor for the demand of retail products and services. Figure 23 presents Statistics Canada 2010 data on average per capita expenditures on various retail products and services in Ontario.34 As also stated previously, similar information on Carleton Place is not available from Statistics Canada; nevertheless, it is standard practice to estimate local data from the provincial-level data. 3.4.2 Trade Area For this analysis, we define the trade area of Carleton Place as consisting of the Town itself as well as neighbouring Beckwith Township. This recognizes the fact that both communities are so closely interrelated that our demand and supply analysis will be based on their aggregation as a whole (rather than just on Carleton Place itself). Figure 24 shows the population of the retail trade area, along with future estimates.35 When Beckwith Township is added to the population of Carleton Place, the trade area becomes significantly larger. Starting in 2009, we applied an annual growth rate of 1.67% per year for both Carleton Place and Beckwith (based on a review of historical population growth rates for these two areas). This provides for estimates of future trade area population based simply on a conservative “steady-state” scenario for future development.

34 Source: http://www40.statcan.ca/l01/cst01/trad38g-eng.htm. 35 Source: http://www.ottawa.ca/city_services/statistics/counts/growth_outside_ottawa/index_en.html.



Figure 23: Total and Per Capita Expenditures for Ontario, 2010

Trade Groups Total ($M) Per Capita CategoryProducts: Supermarkets 25,009.40$ $1,893.12 FCTM

All other food stores 3,770.30$ $285.40 FCTMDrugs and patient medicine stores 12,061.40$ $913.00 FCTMBeer, wine, liquor 7,096.10$ $537.15 FCTMShoes, Accessory & Jewellery 2,195.30$ $166.18 DSTMClothing stores 7,662.90$ $580.05 DSTMHome Electronics & Appliance Stores 5,287.10$ $400.21 AHIMHome furnishing stores 2,065.60$ $156.36 AHIMFurniture stores 3,585.50$ $271.41 AHIMComputer & Software Stores -$ $0.00 DSTMHome Centres & Hardware Stores 10,005.70$ $757.40 AHIMBuilding Material & Garden Stores -$ $0.00 AHIMSporting goods, hobby & music 4,155.10$ $314.53 DSTMDepartment Stores -$ $0.00 DSTMMotor and recreational vehicles 30,182.20$ $2,284.68 AHIMGasoline & service stations 15,882.20$ $1,202.23 AHIMGeneral merchandise stores 20,698.20$ $1,566.78 DSTMOher retail stores 3,926.90$ $297.25 DSTM

Services: Restaurant, bars, other eateries 17,105.63$ $1,294.83 ServicesPersonal care na $675.94 ServicesEducation and culture na $369.31 ServicesSports and recreation na $2,009.92 ServicesReading and entertainment na $434.21 Services

Grand Total All Stores: na $16,409.97Ontario's Estimated Population: 13,210,667



Figure 24: Population of the Retail Trade Area (Past Actuals & Future Estimates)

Year Carleton Place, Town Beckwith, Tp. Total2001 9,083 6,046 15,1292006 9,453 6,387 15,8402009 9,611 6,494 16,1052010 9,771 6,602 16,3732011 9,935 6,712 16,6472012 10,100 6,824 16,9252013 10,269 6,938 17,2082014 10,441 7,054 17,4952015 10,615 7,172 17,7872016 10,792 7,292 18,084

3.4.3 Trade Area Per Capita Expenditures In retail analysis, it is often customary to combine the retail groups appearing in Figure 23 into the four (4) standard store or merchandise types, namely: FCTM (Food & Convenience Merchandise), AHIM (Automotive & Home Improvement Merchandise), DSTM (Department Store Type Merchandise), and Services. How these four groups map to the retail trade groups published by Statistics Canada was shown earlier in Figure 23. Figure 25 uses the 2010 actuals based on the Ontario average per capita expenditures from Statistics Canada and then forecasts forward six years. As was done in the 2007 RDA, we are making the assumption that there is no meaningful difference between the average per capita expenditures for Ontario and for Carleton Place. Also, like last time, we are applying the same demand growth rates to each of the four merchandise categories as was applied in 2007. Our extensive analysis of various retail datasets indicates that changes (both positive and negative) from one year to the next with many retail categories can be significant, especially in the last five years. However, the long-term change over several years is much more modest and consistent with the modest growth rates used in the 2007 RDA and which will be used here again. Again, like with the population growth rates, they represent conservative “steady state” projections. In terms of growth rates in demand, FCTM is assumed (like last time) to grow by 1% annually, AHIM is assumed to grow by 1.5% annually, DSTM by 1% annually, and Services by 0.75% annually (as shown in Figure 25). These growth rates exclude inflation.



Figure 25: Per Capita Expenditures By Major Store Type for Trade Area

Consumption ProjectionsStore Type 2010 2011 2012 2013 2014 2015 2016FCTM Growth Actuals 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%FCTM 3,628.67$ 3,664.96$ 3,701.61$ 3,738.63$ 3,776.01$ 3,813.77$ 3,851.91$ AHIM Growth 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%AHIM 5,072.29$ 5,148.37$ 5,225.60$ 5,303.98$ 5,383.54$ 5,464.29$ 5,546.26$ DSTM Growth 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%DSTM 2,924.79$ 2,954.04$ 2,983.58$ 3,013.41$ 3,043.55$ 3,073.98$ 3,104.72$ Services Growth 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%Services 4,784.22$ 4,820.10$ 4,856.25$ 4,892.67$ 4,929.37$ 4,966.34$ 5,003.59$ 3.4.4 Trade Area Estimates for Total Retail and Service Expenditures As indicated in Figure 26, trade area residents are estimated to have spent $268.7 million in 2010 at various retail and service stores. Furthermore, this spending is projected to increase by $47.9 million or 18% to $316.6 million in 2016. These estimates are derived based on the available population and per capita expenditure data estimated in previous figures.

Figure 26: Estimated Total Expenditure Volumes in Trade Area

Estimated Total Expenditure Volumes in Trade Area ($M)Store Type 2010 2011 2012 2013 2014 2015 2016Population 16,373 16,647 16,925 17,208 17,495 17,787 18,084FCTM 59.41$ 61.01$ 62.65$ 64.33$ 66.06$ 67.84$ 69.66$ AHIM 83.05$ 85.70$ 88.44$ 91.27$ 94.18$ 97.19$ 100.30$ DSTM 47.89$ 49.18$ 50.50$ 51.85$ 53.25$ 54.68$ 56.15$ Services 78.33$ 80.24$ 82.19$ 84.19$ 86.24$ 88.34$ 90.49$ Totals 268.69$ 276.13$ 283.78$ 291.65$ 299.73$ 308.04$ 316.59$



3.4.5 Total Supportable Retail Space The next step in the analysis is to determine the amount of retail space trade area residents’ expenditures support. Industry productivity rates (that is, annual sales per square foot) are used to assess space requirements. A supermarket is supposed to be economically viable at an average sales per square foot of $450 to $500 annually. This is a rough estimate as, obviously, some older stores with low rents and operating costs may well be profitable at a lower average productivity rate. Likewise, a new store in an expensive area/market may not initially be viable at a rate of $550 (due to high rents, mortgage, and other costs). We will use these average productivity rates to estimate the total supportable floor space by the trade area residents’ expenditures in Figure 27. These retail floor space figures are arrived at by dividing the total retail sales volume estimates (Figure 26) by the average productivity rates for FCTM, AHIM, DSTM, and Services. For example, if the high rate of $550 sales per square foot for FCTM is used it implies 108,025 square feet of total FCTM space is supportable by the trade area in 2010. Obviously, if the lower FCTM productivity rate is used ($450 psf), then the amount of supportable space is higher (at 132,031 sf). The figures in the constant column in Figure 27 refer to the productivity rates; that is, the average annual sales per square foot (high and low estimates provided for each of the four groupings).

Figure 27: Estimated Total Supportable Retail Floor Space for Trade Area

Estimated Total Supportable Retail Floor Space for Trade AreaStore Type Floor Space Descriptor Constant 2010 2011 2012 2013FCTM Low 550 108,025 110,928 113,908 116,968

High 450 132,031 135,578 139,221 142,961AHIM Low 1,200 69,209 71,420 73,702 76,057

High 800 103,814 107,131 110,553 114,086DSTM Low 300 159,630 163,919 168,323 172,845

High 225 212,840 218,558 224,430 230,460Services Low 275 284,852 291,781 298,879 306,149

High 200 391,671 401,199 410,958 420,955Totals Low 432.17$ 621,716 638,048 654,812 672,019

High 319.73$ 840,356 862,466 885,163 908,462 The analysis indicates that spending of trade area residents supported a total of 621,716 to 840,356 sf of retail and service floor space in 2010. By 2013, this space is estimated to increase to a range of 672,019 to 908,462 sf. It should be noted that technically in an analysis like this, the total figures refer to total supportable space within, as well as outside, the trade area.



Figure 28 presents the estimated increase in demand for total supportable retail floor space between years and over the period 2010-2013. It shows an estimated total increase between 2010-2013 in the range of 50,303 to 68,106 sf, based on current spending trends of trade area residents.

Figure 28: Estimated Increase in Demand for Total Supportable Retail Floor Space

Estimated Increase in Demand for Total Supportable Retail Floor SpaceStore Type Floor Space Descriptor 2010 - 2011 2011 - 2012 2012 - 2013 2010 - 2013FCTM Low 2,902 2,980 3,060 8,943

High 3,547 3,643 3,740 10,930AHIM Low 2,211 2,282 2,355 6,848

High 3,317 3,423 3,532 10,272DSTM Low 4,289 4,404 4,522 13,215

High 5,718 5,872 6,030 17,620Services Low 6,929 7,098 7,270 21,297

High 9,528 9,759 9,997 29,283Totals Low 16,331 16,764 17,208 50,303

High 22,110 22,697 23,299 68,106 3.4.6 Estimated Existing Retail and Service Floor Space Inventory and Vacancy Rates Based on extensive interviews, field research, and drive-bys/visual estimations, Figure 29 presents estimates for current retail space inventory and vacancy rates.

Figure 29: Summary of Existing Inventory

Summary of Existing InventoryArea FCTM AHIM DSTM Services Vacant Total Vacancy RateHwy 7 73,680 167,949 130,327 42,914 0 414,870 0.0%Beckwith Mall 7,000 2,000 1,500 6,500 1,500 18,500 8.1%CP Mews 47,053 7,750 15,430 14,195 1,500 85,928 1.7%Bridge Street 9,000 4,500 4,500 65,000 10,000 93,000 10.8%Other 40,500 45,300 32,700 32,500 2,000 153,000 1.3%Total 177,233 227,499 184,457 161,109 15,000 765,298 2.0%Total Percentage 23.2% 29.7% 24.1% 21.1% 2.0%



Automotive and Home Improvement (AHIM) represents the largest share of inventory (30%), followed by DSTM (24%), and FCTM (23%). The overall Carleton Place vacancy rate is 2% (which is low by industry standards) but the Bridge Street corridor has the highest vacancy rate of all areas at approximately 11%. This finding further confirms that Carleton Place’s downtown needs attention and improvement. 3.4.7 Warranted Additional Floor Space Two factors shape future retail development: (1) the extent to which there is current over-supply or under-supply, and (2) increases in demand going forward. Figure 30 indicates that up to 158,164 sf of additional retail and service floor space would be supportable in this area by 2013 (this assumes however that trade area residents spend 100% of their shopping dollars within the trade area). While this is unlikely to be the case, there is additional spending by vacationers, cottagers, and pass-by traffic. This means that it is entirely possible that 158,164 sf (or more) of additional development may ultimately be needed. Figure 30 shows that 90,058 sf of retail and service space is needed now with another 68,106 sf needed in the next 3 years, for a total of 158,164 sf.

Figure 30: Total Warranted Floor Space By 2013, Trade Area

Carleton Place Total Warranted Floor Space by 2013

Store TypeExisting Floor

Space

Total Supportable

(Based on 2010)

Warranted Addition

Increase 2010 - 2013

Total Warranted

AdditionFCTM 177,233 132,031 -45,202 10,930 -34,272AHIM 227,499 103,814 -123,685 10,272 -113,413DSTM 184,457 212,840 28,383 17,620 46,003Services 161,109 391,671 230,562 29,283 259,846Totals 750,298 840,356 90,058 68,106 158,164



4.0 Industrial Markets In this section, we begin with an overview of Canadian industrial real estate markets followed by a review of Ottawa’s industrial market. 4.1 Current Industrial Real Estate Landscape in Canada While population, household formation, and income growth are major drivers of retail development, industrial real estate is closely tied to the business cycle (including manufacturing sales) and GDP growth. Developers of industrial space are able to react relatively quickly to increased or decreased demand. This makes industrial markets less at risk of over-supply than office or retail markets which means that historically they have more easily withstood economic downturns. Trends in monthly manufacturing sales in Canada are divergent; while they fell for two consecutive months in April and May of this year, they grew in March. In Ottawa, real GDP growth was at a 10-year high of 3.7% in 2010. However, the current departmental spending freeze announced by the federal government means growth is most likely to slow over the coming years. In fact, the Conference Board of Canada forecasts growth of 2.4% in 2011 followed by an average 2.4% growth per year between 2012 and 2014.36 36 Conference Board of Canada Metropolitan Outlook Winter 2011.



4.2 Ottawa Industrial Real Estate Market The western portions of Ottawa are considered competition for Carleton Place in terms of industrial relocation and expansion activity; hence this analysis will present industrial real estate market data for Ottawa’s western suburbs. Accordingly, all of the Ottawa industrial parks west of Bank Street can be considered as competitive supply to the lands available in Carleton Place. The Ottawa industrial real estate market is unique in Canada in many respects. First, for a city of its size and GDP, Ottawa should have significantly more industrial real estate inventory than it actually has. There are many reasons for this, not the least of which is that Ottawa is not a major manufacturing centre and is dominated by public service and white collar jobs. Even one of its largest manufacturing sectors, the high tech industry, tends to require more office and office/light industrial space than it does typical industrial space. Its space requirements can be very specialized, such as labs and clean rooms. It is not hard to see why Ottawa historically experiences very little industrial ‘spec building’; most new construction is to meet specific market needs or the needs of a single owner-occupant. Ottawa’s location also contributes to this phenomenon. Not only is Ottawa within easy trucking distance from Montreal, it is being serviced by major industrial, warehousing, and logistics providers in Cornwall, Prescott, and Kemptville. While there is certainly the opportunity for Carleton Place to play a larger role in serving Ottawa’s warehousing, industrial, outsourcing, and logistics needs (especially given the expanded Highway 7), there is also significant competition from such providers in Cornwall and Prescott, both of which are located on the 401. Carleton Place would be better positioned as an industrial, outsourcing, warehousing, and logistics hub for the Ottawa Valley (both upper and lower). Figure 31 provides historical Ottawa industrial market data.37 Total inventory today is roughly the same as it was in 1998. There are many reasons why this can occur; a combination of older industrial buildings being retrofitted into other uses, or demolished altogether, along with few new buildings being constructed.

37 Published in the City of Ottawa Annual Development Report 2010 (released September 2011): Industrial Market Review 1998 to 2010; from Cushman & Wakefield, Market Beat Snapshot - Industrial Overview, Ottawa, Q4 reports.



Figure 31: Ottawa Industrial Market Review, 1998-2010

Year Inventory (m2) Inventory (Sq.Ft.) Vacancy Rate (%) Absorption (m2) New Supply (m2)1998 2,059,779 22,172,000 8.6% 39,142 3,586 1999 2,051,277 22,080,481 3.8% 121,340 23,998 2000 2,057,380 22,146,177 1.8% 89,831 38,236 2001 2,243,246 24,146,884 3.0% 35,587 67,375 2002 2,512,852 27,049,000 4.5% 2,972 38,089 2003 2,535,427 27,292,000 4.0% 35,467 22,575 2004 2,232,669 24,033,039 4.2% 34,926 23,039 2005 2,010,898 21,645,837 4.1% 36,874 21,088 2006 2,024,432 21,791,517 3.9% 28,733 15,389 2007 2,053,794 22,107,575 5.1% 8,852 37,105 2008 2,077,661 22,364,490 5.1% 7,907 13,104 2009 2,067,332 22,253,305 5.1% 7,907 13,104 2010 2,021,845 21,762,960 6.6% -18,210 11,381

4.2.1 Current Analysis – Ottawa Currently, the limited industrial supply and the lack of spec building should mean that prices will continue to rise over the short term. Some analysts even believe these conditions could cause the price of older stock to rise as well.38 Total supply is currently about 2.6 million m2 compared to, say, Montreal at 32.3 million m2 (based on Colliers International data).39 Historically, Ottawa’s industrial market has been much more stable (rents, leasing, construction) compared to most major Canadian cities. Again, this is also a function of less supply, less over building / little speculation, and Ottawa’s blue collar makeup. Only one new industrial building over 10,000 m2 was constructed in 2010 (116 Willowlea Drive, Carp).40 In terms of industrial real estate sales transactions in Ottawa, there were 20 such sales (over $500,000) in the first half of 2011 for a total value of $66.8 million.41 This compares to 16 transactions in the first half of 2010 for a total value of $46.2 million. Across all types of commercial (ICI) real estate categories42, the total number of sales for the first part of 2011 was up 18% to 150 sales compared to 127 sales for the first half of 2010. The overall value of these transactions was about $527 million in first half 2011, a 75% increase over the same time period in 2010.

38 Avison Young 2010 Annual Review, Commercial Real Estate 2011 Forecast. 39 Colliers International Ottawa. 40 2010 City of Ottawa Annual Development Report, September 2011. 41 Based on data from the Juteau Johnson Cumba website from RealTrack, Inc. 42 These categories include industrial, multi-family, retail, office, and special; it does not include residential resales.



The typical asking sale price for industrial property in Ottawa is around $80 per square foot (psf); this compares to a national average of $89.77 psf, with the highest prices in Vancouver ($170.98 psf), Calgary ($158.00 psf), and Edmonton ($143.89 psf).43 Figure 32 presents industrial market data for the West Ottawa submarkets considered relevant to this study.44

Figure 32: Ottawa Industrial Submarket Data for the Second Quarter 2011– West Ottawa Only

Market/Submarket Inventory # of Bldgs.

Overall Vacancy Rate

Direct Vacancy Rate

YTD Leasing Activity

Under Construction

YTD Construction Completions

YTD Overall Absorption

Average Rental Rate

West Ottawa Submarkets Kanata 3,165,657 51 12.6% 8.2% 168,804 108,752 0 50,027 $9.13 Bell’s Corners 334,655 11 5.8% 5.8% 0 0 0 (11,480) n/a Morrison/Queensview 415,519 9 0.0% 0.0% 40,144 0 0 0 n/a Woodward/Carling 540,800 23 9.3% 9.3% 4,250 0 0 (10,644) n/a Ottawa Centre 742,339 25 3.5% 3.5% 8,900 0 0 (5,669) $6.00 Ottawa South 695,111 11 12.1% 3.3% 42,947 0 0 1,287 $6.62 West Merivale 534,593 26 1.4% 1.4% 8,515 0 0 4,045 $8.33 East Merivale 587,403 26 7.6% 6.8% 6,160 0 0 (445) $8.50 Colonnade 643,847 22 13.3% 5.2% 5,380 0 0 (23,879) $9.23 Rideau Heights 606,248 28 1.7% 1.7% 0 0 0 (2,020) $7.75

According to Cushman & Wakefield (C&W) Ottawa, the outlook for Ottawa’s industrial market is largely unchanged with construction and absorption activity expected to be much as it has been over the first part of 2011.45 Asking rental rates will range between $7 and $10 per square foot (psf).46 While C&W forecasts a national (Canadian) industrial vacancy rate of (approximately) 6.5%, for Q4 2011 they forecast an Ottawa industrial vacancy rate of 6.4%. In summary, Ottawa’s industrial market has been (and will likely continue to be) driven by the technology sector making R&D/flex space the important industrial product type, at least in West Ottawa. This demand is, perhaps, likely not to be as telecom-sector dominant as it has been in the past. Industrial product exists in a variety of forms including (1) warehousing and distribution, (2) manufacturing, as well as (3) R&D/flex space. R&D/flex space is most typically used by firms engaged in R&D, engineering, biotechnology, and electronic component assembly, as well as those firms needing back office and light storage. Ideally, closeness to airports and well educated labour pools are important for the development of this space type as is the existence of fibre-optic

43 CB Richard Ellis Canadian Industrial MarketView, Second Quarter 2011. 44 Cushman & Wakefield Market Beat Ottawa Industrial Report, 2Q11. 45 Ibid. 46 Ibid.



cabling and state-of-the-art communications infrastructure. Many of the newest buildings in Kanata have all three product types rolled into the same facility. 4.2.2 Current Analysis – Carleton Place and Eastern Ontario In terms of Carleton Place specifically, available industrial market data is very limited, as it is for any smaller town or village outside the Ottawa CMA. Nevertheless, Figure 33 presents asking rental rates based on some current industrial listings in Carleton Place.47

Figure 33: Industrial Rental Rates in Carleton Place

Address Asking Rental Rate Estimated Operating Costs & Property Taxes100 Industrial Avenue $10.75 per sf per year triple net* $3.50 per sf per year 130 Industrial Avenue $11.00 per sf per year 150 Mill Street $6.75 per sf per year triple net $3.25 per sf per year

* Triple net rent includes rent payable to the landlord and does not include additional expenses such as taxes, insurance, maintenance, janitorial, and utilities. The identification of the major manufacturing enterprises in each of the competitive communities provides an indication of the private-sector economic composition of various communities, as well as an indication of who are among the major industrial space users. Figure 34 summarizes the largest manufacturers in each community; while each firm has sales over $1 million, size is relative to the size of the community involved.48 Many of the largest of the large manufacturers in these rural Eastern Ontario communities are subsidiaries of foreign-based firms. 47 Based on a review of various brokerage sites and a review of the commercial MLS listings at www.ottawarealestate.org. 48 Scott’s Directories 2011 Ontario Manufacturers, and other sources.



Figure 34: Largest Manufacturers in the Competitive Communities

Carleton Place, T Arnprior, T Casselman,VL Kemptville Merrickville-

Wolford, VL Mississippi

Mills, T Perth, T Smiths Falls, T Renfrew, T

DRS Technologies

Arnprior Aerospace

Golden Moor Inc.

Jarvis Design & Display

Alloy Foundry

Canadian Hydro

Components 3M Canada GH Metal

Stamping Custom Printers

UPE Canada

Burnsco Technologies

Jet Waste Management

L’IL Sucker Products

Satellite Truss

Canica Design

Albany International

Canada

Guildline Instruments

Deslaurier Custom Cabinets

Dica Electronics

GE Hitachi Nuclear Energy

Loeb Packaging

Lunan Corporation

Kevin Robert Gray Glass

Eagle Air Conveying

Bell Machining

Hangers of Canada

E T M Industries

Engineering Dynamics

Hypernetics Limited

Powermaster Industrial Supplies

Rowland Leather

Canada Bldg.

Materials

Hewitt Tool Engineering

H Imbleau & Son

Hi-Q.A. Inc. M&R Feeds

& Farm Supply

Casselman Cement

Til-Tek Antennae

Central Wire

Industries

Lafarge Canada

Scapa North America

Karhu Woodworking

Nu-Tech Precision

Metals WellTeck

Environ. Eaton Yale Performance Printing

Times Fiber Canada

Lanark Cedar Nylene Canada Grenville

Castings

Rideau Orthodontic

Mfg.

USS Manufacturing

Motion Creative Printing

Pacific Safety

Products Knudsen

Engineering Shorewood Packaging

Valley Automation

Norcan Hydraulic Turbine

Plaintree Systems Perth Soap

Mfg. Smiths Falls Bookbinding

Valley Sales & Equipment

Powerbase Energy

Systems

Sandvik Materials

Technology

Tackaberry Sand & Stone

Weatherstrong Building Products

Rose Integration

Scheel Window

Seagrave Fire

Apparatus Spotton

Sequence Controls



Carleton Place continues to benefit from its competitive locational advantages for industrial development, the most prominent being that it is situated west of Ottawa. Ottawa’s western suburbs have traditionally been its area of strongest industrial demand. It will continue to receive spill-over demand from Ottawa West due to cheaper land, lower rents, and – now – shorter commuting times and more local housing choice. Due to location and the expanded Highway 7, Carleton Place appears to be at a competitive advantage to more distance communities like Perth, Smiths Falls, and Merrickville; however competition from Arnprior and Mississippi Mills will likely intensify.



5.0 Residential Markets 5.1 Canadian Residential Real Estate Overview Home prices have been on a rise for several years. In the first quarter of 2011, average inflation adjusted home prices were up 5% year-over-year in Q1. The national average, however, is skewed by strong sales, including by foreign buyers, of high-priced properties in the Greater Vancouver Area. Excluding Vancouver, average real prices were up less than 1% y/y in Q1, representative of a balanced market.49 Many analysts have forecast that the housing market will slow and house prices could drop, but the market has been surprisingly resilient in 2011. Housing market stability is critical to the health of retail sales and needs to be monitored carefully in the coming months. 5.2 Housing Starts in Ottawa and Eastern Ontario Figure 35 shows that 2008 housing starts in Carleton Place more than doubled from the previous year.50 This level of starts is not the norm – typically, development in Carleton Place (as well as Mississippi Mills) ranges between 60 and 80 units per year. In 2010, over half of residential construction took place in the OMATO municipalities of Prescott-Russell (724 starts in 2010), with Lanark (252) a distant second. Starts declined in Casselman (-38.1%), Merrickville-Wolford (-25.0%) and Russell (-22.2%). We would expect that both Carleton Place and Beckwith Township will experience an increase in development over the next few years with the completion of the expanded Highway 7 to Carleton Place. However, this is also likely to increase starts in other communities as well (such as Mississippi Mills). The federal government’s purchase of the 2.2 million square foot former Nortel campus is expected to result in more housing starts in rural areas surrounding West Ottawa, just as rural areas around Orleans and East Ottawa have benefited from a high concentration of nearby federal government jobs (such as RCMP, DND, NRC, CMHC, etc.). However, DND’s move to the former Nortel campus may not happen before 2016 according to some real estate analysts because DND is generally locked into existing leases until then51; the 2.2 million square foot Carling Avenue campus is equivalent to 35-40% of DND’s total occupied space in the Ottawa region.

49 Scotia Capital, Global Real Estate Trends, June 9, 2011. 50 City of Ottawa Annual Development Report 2010 (released September 2011): New Housing in Municipalities Around Ottawa, 2004 – 2010. 51 Ottawa Business Journal, Monday October 17, 2011; quoting Nathan Smith of Cushman & Wakefield Ottawa.



Figure 35: Housing Starts, 2004-2010

2004 2005 2006 2007 2008 2009 2010 % Change, 2009-2010

Ottawa 6,879 4,700 5,627 6,218 6,679 5,522 6,046 9.5%Prescott & Russell 507 413 417 495 568 492 724 47.2%Clarence-Rockland,C 209 167 150 132 204 193 323 67.4%Russell, TP 155 115 98 156 133 99 77 -22.2%The Nation Municipality, TP 63 55 60 115 112 94 225 139.4%Alfred-Plantagenet, TP 52 42 46 67 80 64 73 14.1%Casselman, Vlg 28 34 63 25 39 42 26 -38.1%Stormont, Dundas & Glengarry 50 55 51 115 39 36 56 55.6%North Dundas, TP 50 55 51 115 39 36 56 55.6%Leeds & Grenville 114 104 98 115 113 109 182 67.0%North Grenville, TP 98 91 92 103 97 101 176 74.3%Merrickville-Wolford, Vlg 16 13 6 12 16 8 6 -25.0%Lanark 241 218 168 174 269 177 252 42.4%Mississippi Mills, Tn 66 90 68 62 70 61 98 60.7%Carleton Place, Tn 85 54 50 54 142 54 73 35.2%Beckwith, TP 65 38 33 34 38 48 59 22.9%Montague, TP 25 36 17 24 19 14 22 57.1%Renfrew 124 120 121 88 104 62 99 59.7%McNab-Braeside,TP 54 34 11 27 26 19 28 47.4%Arnprior, Tn 70 86 110 61 78 43 71 65.1%



Appendix A: Top Retail Chains Based on Increased Number of Locations (Based on Increase in Store Units from Previous Edition of the Canadian Directory of Retail Chains)

Rogers Plus +243 The Source +220 Shell +169 Remedy’sRX RONA Build. Centre/RONA Cashway/RONA Lansing/Pierceys +162

Snap Fitness +134 Pharmaprix +120 Foodland +93 The Cash Store +90 Instaloans +86 Fas Gas Plus +85 Laurentian Bank ABM +81 H&R Block +73 Dollarama +69 Microplay +67 TD Canada Trust +67 Wal-Mart Supercentre +65 Le Chateau +63 Familiprix +59 ICI Paints / Betonel +58 The Brick +56 Marche Extra +53 Chatters Salon +45 JACOB +44 Urban Planet +43 Atmosphere +42 Easyhome +42 Pet Valu +42 Couche-Tard +38 Money Mart +38 Tommy Hilfiger +38 Nofrills +37 GoodLife +36 ListenUP Canada +36 Roots 73 +34 Sobeys +34 Stockhomme / Randy River +34 Centre du Travail +33 Lids +32 Mexx Factory Store +32 EB Games +31

Bell Aliant +30 Sally Beauty Supply +30 SoftMoc +29 Aaron Rents +28 Tan Jay +28 Aldo Outlet +27 GNC +26 Aeropostale +26 RONA Home & Garden +26 Bulk Barn +24 Lindor +24 Amytime Fitness +23 Curtis Lumber/Dick’s Lumber +23 Dollar Giant +23 Ecotone +23 Home Hardware Building Centres +23 Staples +23 Clair de Lune +22 IGA Extra +22 Softron/Taxtron +22 Bouclair +21 Lube-X Fast Oil Change +21 Metro Plus +21 Showcase +20 Best Buy +19 CIBC +19 Fruits & Passion +19 Home Building Centre +19 Home Depot +19 PJC Jean Coutu +19 GEOX +18 Global Pet Foods +18 RW & CO +18 CARSTAR +17 Melanie Lyne +17 Popeye’s Supplements +17 Pseudio +17 Ricki’s / Revolution +17 WirelessWave +17



Appendix B: Top Retail Chains Based on Projected New Openings (Based on Projected Openings of New Stores as Published in the 2011 Directory of Retail Chains in Canada)

International News 24 Cash Shop 18 Sally Beauty Supply 16 Anytime Fitness 15 Bouclair 15 Cobs Bread 14 Staples 10 CosmoProf 9 Academy for Mathematics & English 8 Fast Fix Jewellery Repairs 7 Best Buy 6 Jenny Craig Weight Loss Centre 6 Leon’s Furniture Warehouse & Showroom 6 Moksha Yoga Studio 6 Eclipse 5 Verona 5 Change 4 Green Earth 4 ECCOCI 3 Foxy Boutique 3 J76 3 Sail 3 Superior Tire & Auto 3 True North Mortgage 3 Wicker Emporium 3 Bo bebe lifestyle 2 Frilly lilly 2 Hot Gossip 2 Le Naturiste 2 Paris Jewellers 2 Terra Nostra 2

carleton place situation analysiscarletonplace.ca/photos/custom/cp-situationanalysis-final...

Documents