The Shores in the Mission is able to charge some of the highest rates for retail in Kelowna.

Image Credit: From The Shores Website

KELOWNA - The value of major shopping centres in Kelowna dropped last year, at the same time as the cost of leasing retail space in the city is rising dramatically.

That apparent contradiction is contained in a blog on the MCL Real Estate Group’s web page.

MCL Director Kris McLaughlin’s team checked out the changes in assessed value for commercial space in Kelowna and also looked at what new properties were leasing for and found values going in different directions.

Orchard Park had the highest value as rated by B.C. Assessments for 2018 at almost $300 million, McLaughlin reported. But that’s down 3.6 per cent from 2017. Other malls were down by as much as 7.7 per cent.

“We saw a bunch of assessments for retail type properties bump down a little bit while everything else is creeping up,” McLaughlin told iNFOnews.ca. “We are seeing lease rates going up. When we look at new developments, like the Shore and Ella and Brooklyn downtown, easily hitting in these new projects in the $30 per square foot and inching ever more closer to $40 per square foot.”

There is no “average” square foot rate for retail space in Kelowna, he said.

On Bernard Avenue, for example, lease rates near Okanagan Lake can be in the $30 per square foot range but dip below $20 closer to Richter Street.

The higher lease rates for newly built retail space is in contrast to the big malls.

While Orchard Park is, by far, the largest and most valuable commercial property in Kelowna, it’s actually planning to reduce its shopping space by 38,000 square feet.

Mark’s, with just under 15,000 square feet in the Central Park Power Centre, is expected to grow by about 10,000 square feet at Orchard Park and two other shops will move into the former space occupied by Sears.

The assessed values for some other shopping malls have dropped by 7.7 per cent, including Mission Park, Lakeshore Centre – Save-On Foods, Guisachan Village and Plaza 33, McLaughlin reported.

Spall Plaza, Orchard Plaza and Dilworth Centre were all down 4 per cent while the Capri Centre Mall was up 4.5 per cent.

For some big box stores, their overall value has stayed the same but the value of their buildings went down while the value of the land increased, he reported. Those included Costco, Walmart, Home Depot, Canadian Tire and Rona.

"Assessment is not necessarily indicative of the real estate saleability factor,” McLaughlin said. “Obviously, there’s a lot that goes into it, taking a look at the tenants and the covenants in place and the dollars that are being brought in by the landlord for income.”

McLaughlin estimates about two million square feet of new commercial space will be built in Kelowna in the next 10 years, a 10 per cent increase.

THE 20 HIGHEST ASSESSED COMMERCIAL PROPERTIES IN KELOWNA
From MCL Real Estate Group

• $296 million, Orchard Park Mall
• $80 million, Delta Grand hotel
• $71 million, Orchard Plaza
• $54 million, Spall Plaza
• $53 million, Baron Centre
• $51 million, Capri Centre Mall
• $48 million, Landmark 6
• $47 million, Interior Health
• $46 million, Central Park East (Walmart)
• $45 million, Dilworth Centre
• $40 million, Landmark 3 & 4
• $39 million, Landmark 1 & 2
• $37 million, Mission Park Shopping Centre
• $33 million, Costco
• $30 million, Springfield Centre
• $28 million, Central Park West (Home Depot)
• $26 million, Rona
• $25 million, McCurdy Place
• $25 million, Landmark 5
• $23 million, Capri Hotel

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