Limited Canadian retail real estate supply could lead to more rent increases in the second half of 2023, says a new CBRE report.
Higher construction costs have factored into a softening supply pipeline, said the brokerage firm in its first-half 2023 Canadian retail rent survey, which examined 11 nationwide markets.
“The current economic climate, inflation, and elevated interest rates have paused leasing activity amongst some retailers, but not all,” said CBRE in the report.
Montreal, with eight, and Calgary, with six, reported the most-rental rate increases related to formats or key urban areas. Halifax and Toronto were next with five and four, respectively.
Personal services and quick-service (or fast-food) restaurants are in the highest demand. Open-air centres comprise the favoured format. Some downtown retail markets have been challenged by reduced office occupancy as large numbers of employees work remotely. But results are mixed and urban retail formats saw the most rent increases.
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.