This webinar presented an analysis of market trends and the Canadian economic and retail outlook for 2015. Key points included: - The Canadian economy is expected to see slower growth than other G8 nations in 2015 due to falling oil prices and a higher household debt ratio. Real GDP growth is forecast to be 1.6% for the year. - The retail sector outlook is mixed, with luxury retailers expected to see strong growth while mid-range retailers may lose market share. E-commerce is also forecasted to increase substantially. - Regional retail performance varies across Canada, with solid growth on the west coast, especially in Vancouver, and mixed trends in other areas. Luxury expansion and health/beauty

1. You will receive a recorded copy of this webinar within 24 hours.

2. Market Trends & Analysis for 2015
ISCS Professional Development Webinar
August 27, 2015
Andrew Garrett
Director, Development

3. Agenda
 Canadian Outlook for 2015
 Economic Outlook
 Retail Outlook
 Retail Trends
 Category Growth
 Luxury Expansion
 Growth Markets
 Growth by Region
 Growth by Class
 Q&A

4. Canadian Outlook

5. Economic Outlook | 2014 in Review
 Continued growth in housing market
 Slower employment recovery than
anticipated
 Low interest rates maintained
manageable debt levels
 Record low interest to household-disposable-
income ratio of 6.8%
 Real GDP growth, trade surplus, and
increased consumer prices due to
accelerated inflation

6. Economic Outlook | 2015 Forecast
 Sinking commodity and oil prices
 Record high household debt-income
ratio of 162.6%
 Bank of Canada overnight interest rate
cut to 0.5%
 Exports and investment outlays to increase as a
result
 Cheaper Canadian dollar may curb
cross-border shopping

7. Economic Outlook | Real GDP Growth
 Reduced pace of economic recovery in Canada
compared to other G8 nations
2.0%
0.3% 0.2%
-1.7%
1.6% 1.7%
2.2%
0.1%
3.4%
2.5%
0.4%
1.6%
-0.4%
-0.1%
2.6%
2.4%
1.4%
3.4%
2.2%
1.2%
1.6%
0.5%
1.0%
2.7%
3.1%
1.8%
3.5%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
Canada France Germany Italy Japan United
Kingdom
United States EU Global
2013
2014
2015

8. Economic Outlook | Canadian Interest Rates
 Overnight lending rate cut twice by Bank of Canada
down to 0.5% in 2015
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Bank of Canada Overnight Rate

9. Economic Outlook | Canadian Spending
 Overall slower growth in consumer spending in 2015
Clothing and
Footwear
Leisure and
Recreation
Hotels and
Catering
Total Other
Consumer
Expenditure
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
ForecastYoY % Change in Canadian Expenditure Adjusted for Inflation

10. Shopping Centre Outlook | Supply
 Total shopping centre GLA plateauing at 542M SF
525.6
532.6
541.8 541.9
515
520
525
530
535
540
545
2010 2011 2012 2013
TotalShoppingCentreGLAinCanada(millionsofSF)
Five Largest Canadian
Shopping Centre Owners
47,878,000 SF
28,100,000 SF
27,816,000 SF
24,564,000 SF
24,555,000 SF

11. Shopping Centre Outlook | Demand
 Total Retail sales outpacing shopping centre sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$0
$100
$200
$300
$400
$500
$600
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TotalAnnualCanadianSales($billions)
Shopping Centre Sales as a
Percentage of Total Retail Sales
Annual Canadian Total Retail Sales
($ billions)
Annual Canadian Shopping Centre Sales
($ billions)

12. Retail Trends

13.  Polarized Consumer and Retail Environment
 Mid-range retailers losing market share to luxury and discount brands
 Influx of Foreign Retailers
 Incoming retailers looking to target the growing luxury market
Retail Trends | Growth Categories

14. Retail Trends | Luxury
 Canadian luxury segment CAGR of 30% expected
between 2015-2018
 Market can absorb an additional 2M SF of luxury retail
 Saks, Nordstrom, Holt Renfrew, Harry Rosen and
others have announced 1.5M SF of new luxury space
 Luxury brands moving from high streets to malls
Luxury Sales 2014 $6.0B $72.4B
Percent ofTotal Retail Sales 2014 1.2% 1.5%

15. Growth Markets

16. Growth Markets | Growth by Region
 Solid west coast retail growth and performance
BC
$861PSF
+15.3%
Prairies
$631PSF
+0.7%
ON
$725PSF
+8.5%
QC
$514PSF
+7.4%
Atlantic
$559PSF
+9.3%
Vancouver Edmonton Calgary Toronto Ottawa Montreal
+16.7% +5.7% +3.7% +8.8% +0.4% +8.1%
AB
$770PSF
+2.8%
Canada
$692PSF
+16.7%

17. Thank you. Questions?

18. Economic Outlook | Canadian Debt and Income
 Household debt continuing to outpace total income
Total Debt
Total Income
Total
Disposable
Income
$0.00 T
$0.50 T
$1.00 T
$1.50 T
$2.00 T
$2.50 T
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Forecast
ANDREW’S NOTES

19. Retail Trends | Category Growth
 Strong projected growth for Health & Beauty retailers
1.1%
0.6%
3.6%
1.2%
1.6% 1.6%
0.6%
-3.5%
2.2%
0.4%
0.6%
-1.1%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Apparel and
Footwear
Electronics and
Appliances
Health and
Beauty
Home and
Garden
Leisure and
Personal Goods
Other Non-
Grocery
2009-14 CAGR
2014-19 Forecasted CAGR
ANDREW’S NOTES

20. Retail Trends | e-Commerce
 80% of Canadians live in the country’s 15 largest cities,
making urban centres the hubs of retail activity
 Canadian e-Commerce segment CAGR of 11.3%
between 2015-2020
 Amazon.com Inc. commands a 10.5% market share of
all Canadian e-Commerce
Forecasted e-Commerce Sales 2015 $27.0B $347.3B
Percent ofTotal Retail Sales 2015 5.7% 7.0%
ANDREW’S NOTES

21. Retail Trends | Multi/Omnichannel
 61% of Canadian online shoppers purchase
from foreign omnichannel retailers
 Omnichannel retail defined as ways to “drive the
customer from click to brick and back again”
 Engage with Email, CRM, & Loyalty
 93% of Canadian internet users have opted into email
marketing. 44% have made a resultant purchase
 Digital Marketing
 Only 32% of consumers engage with brands via social media
 Integrated Mobile Experience
 IKEA allows consumers to project 3D images of IKEA
furniture into their homes using the company’s mobile app
ANDREW’S NOTES

22. Growth Markets | Growth by Class
Neighbourhood Regional Power Centre
NET RENT
6 MO.
TREND
VACANCY
RATE
6 MO.
TREND
NET RENT
6 MO.
TREND
VACANCY
RATE
6 MO.
TREND
NET RENT
6 MO.
TREND
VACANCY
RATE
6 MO.
TREND
Victoria
High $24
↓
4.5%
↑
$38
↓
6.3%
↑
$27
↓
1.6%
↑Low $16 0.0% $30 0.0% $20 0.0%
Vancouver
High $30
↓
10.0%
↑ $200
↔
7.0%
↔ $20
↑
3.0%
↔Low $14 5.0% $28 3.0% $10 2.0%
Kelowna
High $28
↔
15.0%
↑ $110
↔
10.0%
↑ $30
↓
5.0%
↑Low $22 5.0% $50 5.0% $20 0.0%
Calgary
High $32
↔
1.5%
↔ $200
↔
2.0%
↔ $80
↑
2.0%
↔Low $24 1.5% $60 1.8% $35 1.0%
Edmonton
High $35
↔
3.0%
↔ $35
↔
3.0%
↔ $40
↔
3.0%
↔Low $22 1.0% $25 1.0% $25 1.0%
Saskatoon
High $36
↑
5.0%
↔ $60
↑
25.0%
↑ $34
↔
3.0%
↔Low $26 0.0% $38 5.0% $22 0.0%
Regina
High $32
↔
3.5%
↔ $50
↔
4.0%
↔ $48
↔
2.0%
↔Low $24 1.0% $30 0.0% $26 0.0%
Winnipeg
High $32
↔
6.0%
↔ $100
↑
5.0%
↔ $35
↔
4.0%
↑Low $20 2.0% $40 1.0% $22 0.0%
Toronto
High $25
↓
8.0%
↔ $130
↓
3.0%
↔ $33
↔
4.0%
↑Low $12 5.0% $25 1.0% $18 2.0%
Ottawa
High $25
↔
10.0%
↔ $100
↔
10.0%
↔ $35
↔
10.0%
↔Low $15 5.0% $50 0.0% $15 5.0%
Montreal
High $15
↔
7.0%
↔ $18
↔
5.0%
↔ $20
↔
5.0%
↔Low $10 5.0% $15 3.0% $17 3.0%
Halifax
High $25
↑
8.0%
↔ $75
↔
1.3%
↓ $25
↑
3.7%
↑Low $20 7.0% $70 1.0% $18 3.4%
ANDREW’S NOTES