Ottawa’s retail recovery a ‘mixed bag’ as downtown struggles, other areas bounce back: Experts

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After bottoming out during the pandemic, Ottawa’s retail sector is “coming back with a vengeance” in neighbourhoods like the Glebe while still struggling in the downtown core, a new report says.

Demand for retail storefront space in the Glebe and Westboro has been “especially brisk” in 2023 as shoppers return to brick-and-mortar stores following a boom in e-commerce during the pandemic, Re/Max said in its latest Ottawa commercial real estate report released on Thursday.

Landlords in those areas are “asking big rents and they’re achieving them,” James Palmer, a broker with Re/Max Hallmark Realty Group, told OBJ.

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“Overall, right now, there’s a shortage of good real estate that includes retail. Retail is much stronger than people would think.”

However, the sector’s recovery has not been evenly felt across the region.

Traditional mainstreet retail strongholds such as the ByWard Market and Bank Street north of Laurier Avenue have been hit hard as office towers hollowed out amid the rise in remote and hybrid work during the pandemic, Palmer added, noting the downtown retail landscape is “much tougher” than it’s been in the past.

Retail analyst Barry Nabatian said that while smaller spaces of 1,500 square feet or less are in high demand all over the city, property owners are having difficulty filling larger retail vacancies even in upscale neighbourhoods such as Westboro.

“It’s really a mixed bag,” said Nabatian, the director of market research at real estate consulting firm Shore-Tanner and Associates. “I would not say that the retail industry as a whole is doing well. Parts of it are doing well.”

According to Statistics Canada, total employment in Ottawa-Gatineau’s retail sector fell from a three-month rolling average of about 106,000 in March to around 103,000 in April. 

Discount stores like Dollarama as well as smaller merchants like bakeries and corner stores are seeing strong traffic as inflation takes a growing bite out of consumers’ pocketbooks, Nabatian said. 

On the flip side, however, retailers of bigger-ticket items, such as furniture and appliance stores, are feeling the pinch as consumers tighten their belts after investing heavily in home improvement during the COVID-19 lockdowns.

“You’re not going to buy a refrigerator or a couch every year or every two or three years,” Nabatian said. “Anything that is not a necessity is not doing all that well now.” 

Palmer said niche retailers that focus on specialty products will continue to flourish.

Meanwhile, he noted that the shifting retail landscape has prompted some big-name merchants to move or close locations, opening up new opportunities for other businesses.

Pointing to fitness club Altea Active’s plans to convert the former Canadian Tire on Carling Avenue into a high-end wellness centre, Palmer said he’s keeping a keen eye on the fate of the former Chapters store on Rideau Street, which has been vacant since the bookseller moved across the street to the Rideau Centre last fall. 

The Rideau Street building is now up for sale, and he said it will be up to the new owner to figure out what to do with the property.

“There are always changes in our market,” Palmer said. “It’s a very dynamic one.”

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