The Canadian retail sector enjoyed a strong performance in 2024, but a report from a commercial real estate investment firm describes a mixed picture for VictoriaB次元官网网址檚 retail rental market.
The CBRE Retail Rent Survey provides a brief look at retail trends in cities across Canada during the second half of 2024. The report highlighted encouraging trends for the market nationwide, with vacancy rates declining to B次元官网网址渉istorical lowsB次元官网网址� and rental appreciation in many areas.
However, the report also noted some challenges for Victoria.
B次元官网网址淐ontinual urban decay in the downtown core caused by social issues, low foot traffic and rent hikes on renewal have led to increased retail turnover,B次元官网网址� the report claims.
Among VictoriaB次元官网网址檚 key retail areas outlined in the report, Government Street was the only area to see a decrease in asking rental rates, while Johnson and Fort streets did not see a significant change.
Downtown Victoria Business Association CEO Jeff Bray acknowledged issues downtown but feels the report mischaracterized the situation.
B次元官网网址淭here is no question that in some parts of downtown, street disorder issues are having a negative impact. However, we still have a relatively low retail vacancy rate compared to cities further east,B次元官网网址� Bray said.
B次元官网网址淲e see significant investment downtown in residential and mixed-use buildings, so I would argue there is not urban decay the way it is described in the report.B次元官网网址�
Bray suggested that an increase in remote work and the continued absence of provincial government workers downtown may be contributing to the turnover rate.
B次元官网网址淚f we had provincial government employees back in the office a minimum of three days a week like their federal counterparts, that would be a huge boost to our hospitality and retail businesses.B次元官网网址�
Despite turnover downtown, retailers in unenclosed spaces B次元官网网址� such as smaller malls, community shopping centres, neighbourhoods, convenience/strip locations and mixed-use areas B次元官网网址� all saw increases in asking rental rates, according to the report. Meanwhile, regional malls, power centres and enclosed community spaces saw no significant change in asking rental rates during the second half of 2024.
The suburban retail market B次元官网网址渞emained robust in the latter half of the year,B次元官网网址� CBRE said, citing a strong pre-leasing market, low regional mall vacancies and new tenants entering the market as factors driving success in these areas. Additionally, there remains a strong demand for new commercial mixed-use developments among quick-service restaurants, medical operators, fitness groups and daycares.