The volume of Canadian retail investment property sales for 2017 is expected to hit a 17-year high, with $5.3 billion in transaction volume already reported for the first half of the year. Eight malls sales in Vancouver were recording during this period, totaling nearly $600 million transaction value. Edmonton posted the second-most mall sales, with five properties selling for a combined total of $115 million, according to a Morguard 2018 Canadian Economic Outlook and Market Fundamentals report.
Retail sales are expected to grow by 5.8 per cent in 2017 and another 2.4 per cent in 2018. Retail sales in non-anchor portions of Vancouver malls hit $924 per square foot in June 2017, nearly $150 above the national average. Ontario per-square-foot retail sales were also higher than the national average at $864. Vancouver sales increased 2 per cent over June 2016, while Ontario sales grew nearly 5 per cent. Alberta sales increased less than 1 per cent year-over-year, at $732 dollars per square foot.
Though sales have increased in most major Canadian centres, the retail industry will face some challenges in 2018.
“The closure of Sears Canada stores with present a more direct challenge for some owners as certain markets will be hit with a flood of new supply,” the report states. “Owners will face ongoing changes in store size, closures and space usages.”
Mall vacancy remained fairly tight at 4.6 per cent nationally during the first half of 2017, according to separate CBRE statistics. Rents during the same period remained restively stable across the board.
“Investment market performance has been relative healthy, but we expect continued moderation over the near term,” Morguard stated.
