Retail strength bodes well for the commercial sector

The healthy trend is predicted to sustain itself well into 2019

Retail strength bodes well for the commercial sector

A more sluggish third-quarter performance did not stop Canada’s retail spaces from having an unexpected 0.2% gain in activity in September, defying expert predictions of flat growth.

The month also saw retail sales increase in 6 of 11 subsectors tracked by Statistics Canada, the agency said late last week.

Together, these areas represented 75% of retail trade, StatsCan told Bloomberg.

Food and beverage retailers had a 0.9% increase in sales, along with car and clothing outlets. Meanwhile, gas station sales shrunk by 1.1% amid a new series of oil price declines.

Read more: Logistics sector will determine demand for Toronto’s industrial spaces

In a fresh report, Morguard Corporation stated that the healthy interest and investment volume in Canada’s commercial property market will most likely not slow down next year.

Retail, which remains a powerhouse segment, will enjoy a good 2019 despite emerging risks like increasingly mixed leasing performance.

“While retail sales growth continues to moderate, properties with development or repositioning potential are expected to generate strong interest among the investment community looking ahead to 2019,” Morguard said.

Growing consumer spending brought about by an economy on the mend will play a central role in the sector’s strength.

“Sustained economic expansion over the next few years bodes well for the Canadian commercial real estate sector as a service provider to the economy. Canadian commercial property sales activity will remain robust over the near term, against a backdrop of positive overall sector performance,” Morguard explained.