Ottawa Retail Market Report

Investors see potential in select retail types. Since the onset of the pandemic, malls in Ottawa have seen vacancy rates jump 320 basis points as of June, which is in stark contrast to the 80-basis-point drop seen across the property sector at large. Older malls were heavily impacted by lockdowns — with some losing key anchor tenants — and struggled to remain competitive in the wake of rapid e-commerce growth. The retail format also tends to house discretionary tenants. With economic headwinds materializing in recent years, consumers shifted their spending to more essential-based products, further hindering lower-quality mall performance. Nevertheless, some investors have begun targeting these obsolete assets for redevelopment and/or intensification. The retail format tends to offer larger parcels of land, making them prime locations to add much-needed housing. This ongoing trend was recently highlighted by the purchase of Carlingwood Shopping Centre, with the new owners stating they plan to add residential units to the site, making it a live, work and play destination.