According to CBRE’s 2025 real estate market outlook released Tuesday, there was no new inventory added to Ottawa’s retail footprint in 2024 and just 90,000 square feet of new construction the previous year.
Get Instant Access to This Article
Become an Ottawa Business Journal Insider and get immediate access to all of our Insider-only content and much more.
Ottawa should see its first new retail construction since 2023 in the months ahead as falling interest rates make new developments more affordable, a leading real estate broker predicts.
“I’m optimistic that we’ll see some new projects actually push dirt in 2025 and hopefully some new supply in ’25 and ’26,” Jamie Boyce, a senior vice-president in CBRE’s Ottawa office who specializes in retail leasing, told OBJ in an interview on Tuesday.
“We’re seeing more positive progress towards getting a few shovels in the ground.”
New retail construction has been at a virtual standstill in the National Capital Region for the past couple of years as rising interest rates, soaring inflation and a shortage of labour and materials drove up the cost of new builds.
According to CBRE’s 2025 real estate market outlook released Tuesday, there was no new inventory added to Ottawa’s retail footprint in 2024 and just 90,000 square feet of new construction the previous year.
But Boyce expects developers to kick into action over the next several months.
He said there are two or three “shovel-ready” retail construction sites in Barrhaven and a couple more in Orléans, as well as projects that are poised to add more density to existing shopping plazas in Kanata.
After years on the sidelines, builders are keen to address a growing shortage of grocery- and pharmacy-anchored malls with food services and other complementary retail offerings, Boyce explained, noting some of the new projects will also likely include a “sprinkling” of professional services tenants such as doctors, dentists and physiotherapists.
“Quality tenants want good product,” he said, adding that the projects in the current development pipeline “will barely scratch the surface for the type of demand that’s out there.”
CBRE’s latest report, compiled by the real estate firm’s team of national and local researchers, echoed Boyce’s assessment of the Ottawa market. It said construction is expected to pick up in 2025 amid “strong retail demand” as “increased consumer confidence will provide a boost to overall consumption.”
At the same time, CBRE is forecasting Ottawa’s retail sales growth to slow to 1.4 per cent in 2025, down from 1.9 per cent in 2024 and 2.1 per cent the previous year.
Boyce said there’s still plenty of reason for Ottawa retailers to be optimistic about their prospects for 2025.
“We’ve never been a peak-and-valley city,” he said. “I think spending locally will continue to grow.”
'Experiential' retail on the rise
CBRE’s report also highlighted entertainment-focused offerings as an area that’s especially ripe for growth across Canada in 2025, saying retailers “that tap into savings, provide entertainment, or are innovative/experiential will continue to thrive during this time” as landlords and tenants seek new ways to entice consumers to spend money.
Boyce agreed. He pointed to concert promoter Live Nation’s new live events venue that’s expected to open in the ByWard Market later this year and Oakville-based Splitsville Entertainment’s new 26,000-square-foot, 18-lane bowling and entertainment facility that is slated to open early in 2025 at Kanata Centrum as examples of the growing move toward so-called “experiential-based” retail offerings in Ottawa.
“Compared to other Canadian markets, other international markets, we’re underserviced on that type of stuff,” he said. “There’s a lot of other cool and unique (entertainment providers) that are looking at Ottawa. I think you’ll see that kind of trend line continue.”
The anticipated burst of new retail construction comes as a number of suburban shopping plazas, including the 86,000-square-foot Avalon Centre on Tenth Line Road in Orléans and a two-building, 10,500-square-foot development on Robertson Road in Bells Corners, have recently changed hands.
Boyce said the sales are a sign that malls anchored by grocery stores, such as Farm Boy at the Avalon Centre, and other key amenities continue to be “very attractive to the investor market.”
After noting the recent Bells Corners transaction, he teased that there are “exciting things” in store for the west-end neighbourhood’s retail sector in the year ahead.
“Robertson Road, I think it had a great period during the Nortel days, and I think everyone's expecting a renaissance in Bells Corners with (the arrival of) DND that’s been delayed due to COVID,” Boyce explained, adding the new offerings will be “great additions to the ecosystem in Ottawa, and I think they’d help all businesses on Robertston Road and in Bells Corners.”
