Photo Credit: Pixabay
The 2020 Canadian Real Estate Market Outlook has proven that Canada is one of the best destinations for both global and domestic capital. When it comes to commercial real estate, this is the decade in which Canada will dominate, and there are several reasons why this is happening right now.
First of all, Canada has the highest leasing demand in its history. Along with that, rents are constantly rising due to market expansion. Companies renting retail space are also rising to the occasion and fulfilling their part of the deal.
Furthermore, Canada is no longer only about Toronto and Vancouver. Retail commercial real estate opportunities are expanding in Saskatoon, Edmonton, and Calgary, among other places. Let’s see some of the most important data of the 2020 Real Estate Market Outlook.
Record demand for Canadian retail CRE is due to societal changes, technological developments, and various policies across several decades. Various cities in Canada have become attractive locations for businesses, investors, and residents.
At the same time, commercial real estate has widely gained the status of a stable and profitable investment. As an example, in prime locations the retail sector is rethinking uses for spaces. Storefronts, from food to apparel, are being transitioned into pick-up stations for everything. The rise of “ghost kitchens” where the food preparation and cooking facilities are being set up for delivery-only meals will be a trend near prominent downtown locations. Problematic retail properties in the downtown and suburban areas of major markets are expected to get a second life through redevelopment efforts.
National statistics for retail shows that there will be 4.31MM sq.ft of new supply in 2020 and total retail sales are expected to grow by 2.9%. With total retail sales per capita forecasted at $16,801 versus $16,480 in 2019, according to CBRE Research, 2020 indicates that retail is expected to outperform its 2019 performance.
Historically the biggest Canada retail CRE changes happened in the largest cities. However, the new outlook shows that there is a lot going on in those smaller markets as well. Smaller cities are getting their spotlight due to broader workplace trends as well as global investments.
Domestic companies also want to get in on the market and compete with foreign capital. Their primary markets are Ottawa, Quebec, and the Waterloo Region. Projections show that many smaller markets will outperform their forecasts, including:
* Montreal by 13.8%
* Quebec by 10%
* Waterloo by 10%
* Ottawa by 8.5%
The Canadian Real Estate Market Outlook forecast shows that Calgary retail commercial retail investments are going to grow over $400 million compared to $386 million in 2019. Even though Calgary is a hot rental market for apartments, the trend is rubbing off on commercial retail as well, and there is noticeable growth.
On the other hand, the total retail sales growth in Saskatoon is projected to have a 3.7% increase in 2020 compared to a year earlier. Along with large mixed-use development projects for both commercial and residential space, it’s expected that the market will grow even further.
Canada is entering the new golden age of retail commercial real estate, and the numbers show it. All indicators are strong and positive. If you want to learn more about it, contact ReDev Properties today.