Image Credit: Scott Maxworthy Unanticipated trends could augment the net performance of local shopping plazas in Western Canada in the months and years to come, leaving many wondering as to how these trends might help to deliver above average returns to commercial real estate investors. Here are 4 trends that could boost Canadian retail property performance over the next several years. The New American Boom & Bust Nobel prize-winning economist and creator of the Case-Shiller indexes, professor Robert Shiller recently told The Telegraph that he expects the new mode of spending in the U.S. to lead to another 20's style crash and a change in the spending mentality of the populist. A short term global shopping spree could certainly have some benefit to Canadian firms. While a new crash, or anticipated crash in stock prices and spending south of the border could also boost interest in commercial real estate in Western Canada. A larger appetite for these assets would help elevate equity and property prices. Health & Fitness With boomers aging in droves and Instagram demanding that we all look incredible, all the time, health and fitness are areas set to explode in popularity over the next few years. This is likely to go far beyond what we have seen already, as we are also seeing a divergence in how consumers are getting their fitness fixes as well. The deep dive in smart watch prices and pre-installed fitness tracking apps are encouraging the masses to get out and walk and workout more, which could serve local shops very well. We are also seeing a sizable shift away from the big gyms to boutique fitness centers. Although these types of facilities may cost more to join, they offer more customized and personalized options and a community feel. Demand for Larger Retail Spaces The retail and commercial real estate industries have been largely expecting to see a continued downsizing trend in the square footage requirements for brick and mortar companies. However, a new report from the Financial Post shows how one retailer is bucking this trend and is finding their expansion plan is benefiting from securing stores 3x larger than average, which is great for landlords as well. Challenging Property taxes The property tax adjuster industry is booming. It is a multi-billion dollar industry, which may be even more popular as property prices and taxes rise. In parts of the world like New York City, even the government admits that almost 50% of property owners are over-charged, and are eligible for appeals and refunds every year. This is certainly a problem in Canada as well, and anywhere with annual property tax levies. Property owners stand to save big if they become aware of their right to challenge tax bills, and insist on reduced charges. That cash goes right to the net bottom line. Summary Some Canadian retail property owners could find their assets are outperforming forecasts over the next 24 months, if they are accommodating and anticipating these trends. Investors should look for ways to capitalize on these evolving factors, while optimizing and restructuring investment portfolios this year.
- July 3, 2017
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