Penticton’s retail sector in good shape, says consultant

PENTICTON – Penticton’s retail market is quite healthy moving forward, but the city will need to find more industrial floor space in the future, according to a report to city council.

Colliers International consultants James Smerdon and Russell Whitehead presented an executive summary of a commercial and industrial capacity study recently completed for the City of Penticton to council members this afternoon, June 5.

The study was commissioned to provide a three-decade perspective into future growth projections for the city, based on low, medium or high growth categories.

A similar study was done on the city’s future housing needs recently. Penticton special projects manager Ben Johnson said the assessments would aid the work being done on the city’s official community plan.

Whitehead told council the city’s retail inventory, currently at 2.5 million square feet had a 5.4 per cent vacancy rate overall, but was as high as 12.1 per cent downtown.

Coun. Andre Martin asked if projections indicated brick and mortar retail was in decline with the rise of internet shopping. Smerdon said he expected by 2046 online shopping would have a played a minor role on local spending.

“Cherry Lane will be there. Retail’s not dead – what we’ll see is online retailers taking on brick and mortar space to better reach their customers,” he said, adding a slight decline in retail was factored into the report to account for internet inroads over time.

Smerdon also noted Penticton’s vacancy rate at 5.4 per cent, was “a healthy number,” while the 12 per cent vacancy rate for the downtown sector was “creeping a bit high.”

“Compared to Vernon and Nanaimo, you’re doing just fine,” he told council.

The two consultants said industrial demand in the city is expected to be strong and growing, with limited room for expansion in existing areas.

They emphasized the need to continue seeking new parcels of land that could be used for industrial expansion.

They also noted Penticton’s soft office rental market, presently at 770,000 square feet, with a 7.5 per cent vacancy rate.

Whitehead said there was minimal demand for purpose-built office buildings at this time.

The report will be handed over to city staff and the Official Community Plan task force for further analysis.

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