CBRE’s H1 2024 Retail Rent Survey was recently released, providing an essential look at retail rental trends across Canada. Covering 11 key cities—Victoria, Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Kitchener-Waterloo, Toronto, Ottawa, Montreal, and Halifax—the survey tracks rental rates and market conditions across various retail formats. The survey is particularly valuable for understanding shifts in demand, rental growth, and market dynamics that have emerged in the first half of the year, providing data-driven insights into Canada’s evolving retail landscape.
The survey found that with strong competition for retail space, rents are rising in most markets, reflecting the growing demand for prime locations. The report highlights that rental growth is widespread, with significant increases in suburban power centres and key urban areas, particularly in eastern cities like Toronto and Ottawa. As vacancy rates tighten due to rising construction costs and limited new supply, the report expects rental rates to remain elevated.
Out of the 120 areas surveyed, 40 experienced rental rate hikes during the first half of 2024, the highest number recorded in the survey’s history. Toronto and Ottawa led the charge, reporting rent increases across seven retail formats or key urban areas, a significant concentration of growth in these eastern markets. This represents a geographic shift in rental activity, as eastern cities outpace others in terms of rising rents.
One of the standout retail formats was the power centre, which saw rent spikes in seven of the 11 markets studied. These suburban, open-air retail hubs that typically feature standalone big-box retailers and smaller specialty shops, reported an average rental growth of 10% compared to the end of 2023, underscoring growing demand for larger spaces outside of traditional city centres.
While urban areas benefited from increased tourism and summer events, helping to drive foot traffic in certain markets, others are still grappling with reduced daytime activity. Despite these fluctuations, rental rates continued to climb in several key urban nodes across six markets.
Another factor influencing this trend is the high cost of construction, which has become a limiting force across many regions. The rising costs are restricting new retail development, keeping vacancy rates tight and rents elevated. New supply remains concentrated on mixed-use developments, which are adding both retail and residential units, particularly in high-demand areas where housing is scarce.
The report highlights the continued demand for space and the upward pressure on rents, especially in key eastern cities and suburban retail formats. As construction costs limit supply and demand continues to grow, elevated rents are likely to persist, making retail an increasingly competitive and valuable asset.
The full report, including breakdowns by each city, can be found on CBRE’s website.
