BC and Ontario aren’t just superstars in residential property, they rock in the commercial real estate world as well – home to the 10 top malls in Canada.
It’s well documented that these two provinces are home to Canada’s most expensive and most active housing markets. Now, a new study from commercial real estate services firm Avison Young shows they are also the top performers in retail sales.
What’s the correlation? We’ll get to that in a minute.
The study shows that BC and Vancouver were the leading province and city for retail sales growth in 2015, at 6.6 per cent and 9.9 per cent, respectively, followed by Ontario at 4.5 per cent and Toronto at 5.4 per cent.
Toronto’s Yorkdale Shopping Centre was Canada’s most productive mall, with retail sales of $1,610 per square foot, displacing Vancouver’s Pacific Centre, which topped the list in 2014.
Five of the 10 top-performing malls are in Ontario, and four of those are located in the Greater Toronto Area.
“Despite economic headwinds, retailer failures, digital disruption and the purchasing habits of a new generation, Canada’s evolving retail property sector and its top malls are doing just fine,” says Bill Argeropoulos, principal and practice leader, research, Canada, for Avison Young. “While hundreds of millions of dollars have been invested to renovate, expand or upgrade some of the country’s prominent malls to attract new retailers and combat e-commerce, the retail sector continues to attract new entrants and significant investor interest as well.”
So, what does all this mean for residential real estate?
Not to oversimplify Economics 101, but solid population and wage growth are among the key contributors to both healthy retail and real estate sectors. And with BC and Ontario economies and housing markets leading in this regard, it’s no surprise that residents in these areas are brimming in the consumer confidence department.
So, those markets that are seeing the largest retail sales growth, are also those that are experiencing strong average home price growth.
On the flip side, not surprisingly, oil-dependent provinces such as Alberta and Saskatchewan, which Argeropoulos says have the weakest outlook for retail sales, are also among the areas where home price growth is weakest.
When the likes of Saks Fifth Avenue and Nordstrom set up shop, or when a retailer such as Yorkdale Shopping Centre undergoes a major expansion, it’s usually a sign of good times, and that an area is on the upswing. Like proximity to mass transit, schools and other amenities, being close to shopping is a major attraction for homebuyers. These features are among the keys to enjoying your home while you live there, as well as for potential resale value in the future.
Large retailers and commercial ventures don’t just pop up in the middle of nowhere or in declining neighbourhoods. These companies make careful, long-range and well planned-out decisions in lockstep with municipalities and developers, based on hard data, research and demographic information.
This is why major retail expansion is good news: it’s an indicator the economy continues to strengthen; and, for those looking to buy a home, it’s a sign to look out for new or expanding neighbourhoods and solid buying opportunities
Major retail expansions underway in the GTA
- Is undergoing a $350-million expansion to add 210,000 sq. ft. of retail space, bringing the total to 1.3 million sq. ft. and 245 stores
- Includes four new full service restaurants, each with a unique dining experience
- New, large stores for Harry Rosen and Sporting Life
- Saks Fifth Avenue, opening in 2016
- Nordstrom, opening in 2017
Yorkdale Shopping Centre
- Is undergoing a $331-million expansion, to be completed in fall 2016
- Includes 298,000 sq. ft. of new retail space
- Is undergoing a $320-million expansion, to be completed in spring 2016
- Includes a new 120,000-sq.-ft. Holt Renfrew
- Also features another 75,000 sq.-ft. of space for additional retailers
Content courtesy of http://www.nexthome.yp.ca
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