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.
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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.”
