Increase in commercial construction expected in ’24

By Lethbridge Herald on October 20, 2023.

Herald photo by Steffanie Costigan Jeremy Roden and Ashley Soames say Lethbridge will likely see a boom in retail sector inventory next year.

Steffanie Costigan
LOCAL JOURNALISM INITIATIVE REPORTER

Commercial real estate company Avison Young feels the city’s retail sector will “likely see a new inventory supply boom in 2024.” 

Jeremy Roden, Executive Vice President of the Avison Young Lethbridge brokerage office, said a slowdown in construction was due to the pandemic but now there will be more retail development here moving forward. 

“This lack of construction was just simply due to the pandemic period and construction costs, increasing interest rates –  developers pausing with that. But now it’s time that they commence. Because there’s interest lease deals getting done, buyers are still in the market. 

“And developers are needing to satisfy that interest. And so in 2023, we’ve seen a lot of leasing activity. In 2024, we’ll see a lot of construction activity with new developments, retail developments to satisfy that leasing interest and new tenant interest,” said Roden.

Roden said the community has not seen new developments in some time but added there will be benefits to these new developments in Lethbridge and around the province, not to mention excitement. 

“There’s going to be some excitement around that. And obviously, the labour force will be affected in a good way. And there’s going to be some employment that will take place that hasn’t maybe happened on the trade side or the labour side for the last couple of years. So we’ll see an increase in that area. And I mean, just the excitement of (bringing) some new businesses to the community and new tenants to the market.”

Avison Young senior associate Ashley Soames said the company services more areas than Lethbridge and talked about anticipated anchor sites for potential grocery stores.

“We service more than just Lethbridge; we service smaller communities within southern Alberta. And we have about three or four grocery-anchored sites that we’ll see likely commence some form of development in 2024,” said Soames.  

Soames explained the development could also spur more services such as medical and daycare facilities. 

“It creates a bit of a domino effect . . . We’re seeing a lot more growth within the retail sites that are full service. The impact to the communities is having walkable sites with full amenities, from wellness, to food, to personal services, even to medical and daycare, along with your standard grocery, liquor, fuel.”

Soames said the Lethbridge vacancy rate in the retail sector is very low, sitting overall at three per cent. 

“There’s become a little bit of competition and our ability to backfill any vacancies has been, we have we have a wider range of users available to us that want those spaces. And that’s why when we talk about new buildings coming in 2024, it’s a necessity to keep the growth going with an influx of new users,” said Soames. 

Roden noted more construction is anticipated to start in 2024 and will continue right through 2027. 

“More construction and more interest in the market. Plus, there’s a population increase in Lethbridge due to immigration, which is an important impact to the community. 

“And we’re seeing a lot of new business owners enter our market enter Lethbridge and open new businesses. So not just the existing business and growth, but new business and growth,” said Roden. 

The new construction and growth will be happening in all areas of Lethbridge but primarily on the west side of Lethbridge with the north and south sides will be seeing some construction and redevelopment.