BBS Realty
Your link to commercial real estate in Hamilton and Burlington

Hamilton: 905-529-5900
Burlington: 905-634-4567

Retail Report 2017

The Golden Horseshoe, including the greater Hamilton area, has been experiencing a real estate boom in all sectors of the real estate market. With low interest rates, the spillover effect from the migration of buyers from the overheated GTA seeking out value priced properties within proximity of the GTA and the low real estate inventory combined with foreign investment, has generated tremendous interest in this area. These factors and more have combined to make the Golden Horseshoe a destination for real estate investors and buyers alike to invest, work, live and play.

The local residential boom which began about 4 years ago in the Greater Hamilton area has been driving demand for retail sector services throughout the region. After many years of relative vacancy and rate stagnation in the small to mid size neighbourhood and community non-food anchored plazas, the vacancy absorption for retail properties has increased. Demand for new retail opportunities has heightened due to a lack of available retail space in growth areas in recent years combined with the fact that national, regional and local businesses have been expanding to backfill the demand across most retail, office, health and beauty, wellness, services, food and other sectors. Retail plaza development in the greater Hamilton area has not kept pace with demand, particularly in the high demand and newly constructed subdivision areas.

In the last couple of years the retail vacancy rates have dramatically decreased and the rental rates have gradually increased in the Golden Horseshoe area. The average net rental rates for existing plazas along a major traffic artery range from $14.00 per square foot to over $20.00 per square foot for an existing prime retail location. These rates vary depending on unit and plaza size, location, exposure, parking, access, age, anchor types and other dynamics and factors. Net rental rates for new retail centres range from $18.00 to $25.00 per square foot for small to midsized units and higher rates for end-cap and freestanding units which can range from $25.00 per square foot to over $30.00 per square foot for prime locations. As demand increases for prime retail locations, landlord inducements including free rents, landlord work and tenant allowance offerings tend to be minimized. Overall, the retail plaza sector is a very attractive investment for an owner due to tenant demand guaranteeing brisk pre-leasing and lease up and investment value in these growth areas. This retail growth is anticipated to continue for many years to come.