Article
What You Need to Know About Canadian Retail
March 2, 2023 4 Minute Read
Canadian retail markets are showing signs of stability and growth as in-person shopping has returned with a vengeance, according to CBRE’s just-released Retail Rent Survey. Here are some of the report highlights.
Sentiment Is Positive
Despite economic headwinds, retail sentiment remains positive for 2023. In-person shopping has made a comeback. Most Canadian cities recorded stable or growing retail rental rates in the second half of 2022, with 23 increases and only three rent declines observed nationally. This increased retail activity bodes well for the coming year.
Rents are Rising in Western Canada
Asking rents are soaring across Canada amid growing demand from new-to-market and existing retailers, limited new supply and inflated construction costs. Cities west of Winnipeg observed the most rent appreciation. Leading the increases were Saskatoon and Vancouver.
High Costs are Slowing Developments
While construction costs have dropped from their peak in many cities, the combination of high costs, increasing interest rates and weak residential markets has hindered development activity. Many retailers are opting for second-generation space to save on build-out costs, particularly in Toronto and Vancouver.
Exciting Retail Projects Are Coming
2023 with see the arrival of several new retail projects. Keep your eyes peeled for The Post in downtown Vancouver and the expansion of Willowbrook Mall in Langley, BC, as well as mixed-use projects such as the Bridgewater and Sage Creek neighbourhoods in Winnipeg, and Richmond Yards, Halifax’s largest mixed-use development. In Toronto, The Well is set to begin occupancy this year.
Brick and Mortar Still Matters
You may have noticed some of your favourite online brands sprouting into physical stores. Digitally native brands such as Mejuri, Allbirds, Monos and Vessi are proving that brick and mortar continues to play an important role in the retail ecosystem and the customer experience. Shoppers can expect this trend to continue into 2023, along with the growth of specialty grocers, the reemergence of luxury brands, and the rise of non-traditional medical users such as fertility centres, medical spas, and plastic surgery clinics.
Recent Insights
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Fraser McKenna and his team are working with Beedie, a West Coast residential and commercial developer, to sell industrial condo units at BOLT, its new development in Bolton, ON.
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The Canadian retail sector faces robust demand, low vacancy rates and limited construction activity, but CBRE’s Alistair Corbett says new developments are about to kick off in Alberta.
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CBRE Group, Inc. earlier this year combined its project management business with Turner & Townsend, a majority-owned subsidiary that provides program management, cost consultancy and project management services globally.
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