While some Canadian and U.S. markets ─ notably Calgary, Edmonton and Las Vegas ─ continue to experience high levels of construction, the overall supply of retail space is declining, a new study from JLL finds.
“The real estate industry in North America faces rising construction costs and high interest rates,” the report notes. “As a result, retail development starts have slowed and construction timelines have lengthened, with no long-term resolution in sight. However, retailers have seen some relief in spot closures and a handful of new projects.”
Canada’s Vancouver, Toronto and Ottawa-Gatineau are the tightest markets in North America. In Toronto, retailers are scrambling to find retail space in the city, particularly Class A opportunities. The Toronto Eaton Centre ─ a major downtown mall ─ quickly attracted tenants for its former Nordstrom space of more than 200,000 square feet, bringing in Simons, Nike and Eataly.
Also of note in Canada is the debut of Royalmount, a new mixed-use development in midtown Montréal. With 824,000 square feet of retail space just completed, Royalmount is the first new shopping center of that size in Canada in nearly a decade.
In the U.S., as more tenants compete for the limited retail space, the expected closure of thousands of stores ─ including Walgreens, Family Dollar, Big Lots and 99 Cents locations ─ might provide some relief.
The U.S. pipeline also includes some larger-scale mixed-use projects, including Nashville Yards in that Tennessee city’s downtown, which will have 350,000 square feet of retail, dining and entertainment space, and San Diego’s renovated Campus at Horton complex, which will bring 300,000 square feet of retail space to that city’s Marina District.
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