Photo Credit: Unsplash
Even amid the ongoing pandemic, the Canadian real estate market continues to grow. The retail CRE (commercial real estate) sector has shown particular growth this year, as investors still see huge profit potential in Canada.
The pandemic has greatly impacted the market, but it only made room for new trends focusing on improving strategies and staying resilient.
According to PwC Canada and the Urban Land Institute research, these are the emerging Canadian real estate trends for 2021 that everyone should watch out for.
Building 18-Hour and 15-Minute Cities
With more companies allowing remote work, many Canadians are looking for affordable housing opportunities to move to suburban and rural areas, away from densely populated cities.
This is slowly creating a trend of 18-hour cities, which are mid-sized cities with higher-than-average population, jobs, wage growth, higher cap rates, and a lower cost of living and doing business.
There’s also a rising trend of 15-minute cities, where Canadians would be able to go to work, grocery store, school, and anywhere else within 15 minutes, either by foot or bicycle.
Both of these city types are excellent real estate opportunities, precisely because of their massive growth potential.
Increasing Warehouse Space
As the pandemic increased the demand for online shopping, retailers are looking for more warehousing opportunities.
Many Canadian investors and realtors think they have a solution. They suggest that excess space at shopping malls should be repurposed for warehousing, distribution, or fulfillment purposes. Many of them agree that grocery malls would be the best bet.
Developing Suburban Offices
Due to increased remote work, suburban offices may become the new normal in 2021.
According to PwC Canada, 37% of employees prefer working in an office, while 34% of employees favor working from home.
Both groups would like an office closer to home, and their wish might just come true. Many companies across Canada that can afford to have a remote workforce are reassessing their retail CRE properties and looking into the development of suburban office spaces.
Repurposing Shopping Malls to Medical Office Space
Telehealth in Canada has increased during the pandemic, especially among the senior population. However, there’s still a need for physical space.
As plenty of healthcare centres are going digital, they are increasingly repurposing their medical office space.
Numerous shopping malls with high foot traffic are also repurposing their space to bring in various healthcare functions, as hospitals struggle with limited space.
The pandemic has called for some major shifts in how we use commercial real estate. As demands for Canadian retail space continue to evolve opportunities will continue to present themselves and retail CRE investors will continue to reap the benefits of being innovative. Plenty of retail and mixed-use CRE opportunities will continue to be available in 2021.