Recent research by the Downtown Yonge BIA indicates a ‘cautious return’ to business for the Toronto district.
According to the BIA (Business Improvement Area), more than 40 per cent of businesses say they are better off than a year ago, while seeing steady improvement so far in 2022.
“No question the pandemic was very challenging for businesses in this area, so it is heartening to finally see some optimism,” said Pauline Larsen, Downtown Yonge’s Interim Executive Director. “As a crucial economic and tourist hub we are thrilled to see upward trends for residents, visitors and businesses.
“We’re getting there. Obviously there is still plenty of ground to make up, but the economic news is certainly positive – which is a welcome change.
“I would say I would like to be able to call this the summer of recovery but possibly my cautious nature would call it the summer of cautious recovery.”
The BIA is located in the Yonge/Dundas neighbourhood. It represents just over $7 billion worth of commercial real estate with over four million square feet of retail space, more than 700 retail stores, and landmark properties such as the CF Toronto Eaton Centre, Yonge-Dundas Square, Toronto Metropolitan University, and College Park.
“We have some of the highest foot traffic counts, certainly in the City of Toronto if not in the country. And of course we’ve been keenly watching to see how pandemic recovery has been unfolding in the last several months,” said Larsen.
As of June 15, office occupancy in the entire downtown was about 26 per cent – well above the last peak (16 per cent) in November 2021 and a huge improvement over the five per cent occupancy in May 2020.
“The office return is underway. I would say what’s interesting about that data is that about 40 per cent of those staff are in the office at least once a week. But in terms of being full-time back in the office the occupancy is still 26 per cent. A lot better than it was a year ago . . . but obviously we’d still like to see that number come up,” added Larsen.
In Downtown Yonge specifically, at the end of June, the overall retail vacancy rate has improved to about 13.47 per cent but there’s still a higher vacancy rate for street front vacancy than the mall retail.
“We’re seeing strengthening of indicators overall but it’s not strengthening at the same rate for every sector in the neighbourhood,” explained Larsen.
“Since the last vacancy figure that we looked at in May the first urban format IKEA has opened which we’re really excited about and has been extremely well reported. That was a really good sign of confidence for us in the neighbourhood economy.”
Larsen said pedestrian counts have also strongly improved. They more than doubled in May compared to May 2021. Pedestrian traffic on Yonge Street has increased steadily every month, a sign of renewed consumer confidence as restrictions eased.
“For example, we pulled out the comparison for Victoria Day 2022 compared to a year previous and there was a 200 per cent increase in foot traffic on Yonge Street north and south of Dundas over that four-day weekend which was something in the region of 900,000 people over that four-day weekend on Yonge Street,” she said.
“So that for us was a very significant improvement and we’ve seen similar stats in June with the events we started to track the pedestrian traffic counts.
“Somewhere in the region of 80 per cent of all of the traffic flow on Yonge Street is pedestrian traffic. So from the point of view of activating the neighbourhood, making the place feel energetic and vibrant, that return of pedestrian traffic is very critical for us and so we’re very, very happy to see that.”
The latest data for visitors, from Environics until the end of February, indicates an 85 per cent year-over-year increase. What’s interesting is that there was a much higher number coming from visitors further away from the neighbourhood.
“In the grip of the pandemic, obviously visitors decreased significantly and they came from not more than a 25 to 30-minute drive away. What we’re seeing now is this increase in visitors but they’re coming from sort of a 50-minute drive away,” said Larsen. “So people are traveling further to come into the Downtown Yonge neighbourhood. And again that’s good news for us.”