In Q2 2024, Toronto’s retail market softened, and this downward trend is expected to persist throughout the year, according to commercial real estate firm JLL’s most recent Toronto Urban Retail Report Q2 2024.
The report said:
- Q2 2024 average asking rents across Toronto’s 11 retail corridors decreased by 2.2 per cent to $91.58 net per square foot;
- The number of direct ground floor availabilities totaled 109, or 8.26 per cent of the storefronts in the corridors tracked by JLL; and
- Ossington Avenue, Leslieville and Queen Street West (Spadina to Bathurst) remain Toronto’s tightest submarkets.
“Torontonians have significantly adjusted their spending habits, prioritizing essential expenses such as housing, rent, and food. Discretionary categories, including previously strong performing sectors like home improvement and furnishings, footwear, sporting goods, and cannabis, have faltered,” said the JLL report.
“Notably, laptops and cell phones have emerged as resilient segments. Despite challenges in retail, Toronto’s real estate market has demonstrated its resilience and remarkable recovery. Downtown office worker attendance has consistently increased, with Wednesdays witnessing an impressive return to nearly 80 per cent of pre-pandemic levels. Local transit and regional commuter rail have witnessed a commendable resurgence, reaching 78 per cent of pre-pandemic ridership.
“Toronto’s tourism industry is also showing promising signs of revival, outpacing 2019 spending figures, particularly with the return of international visitors. Furthermore, the downtown core has become an attractive investment hotspot, fueled by the resurgence of office workers and the revival of tourism.”
The report said the recent opening of three exciting food halls, Queen’s Cross at the Eaton Centre, Wellington Market at The Well, and Waterworks at 50 Brant Street, has added to the vibrant culinary landscape, catering to both Torontonians and visitors.
“Despite sector-specific challenges, the Toronto real estate market is displaying positive recovery and adaptive characteristics. The increasing presence of office workers, strong public transit ridership, robust investments in the downtown core, and the gradual revival of tourism collectively contribute to the ongoing recovery of the city’s real estate market,” added the report.
In total, 24 new leases were transacted in Q2 2024 totaling over 41,000 square feet. The two most active submarkets by number of lease transactions completed were Queen Street West (Spadina to Bathurst) with eight and Yonge Street (Eglinton to Blythwood) with five, explained JLL.
The largest lease of Q2 2024 was signed by a medical clinic who leased over 4,600 square feet at 11 Yorkville Avenue at the base of Riocan, Capital Developments and Metropia’s new 11YV development, it added.
“Queen Street West (Spadina to Bathurst) saw the greatest number of square feet leased at 12,365 square feet with Yonge Street (Eglinton to Blythwood) in second position at 6,929 square feet. Once again, food & beverage (F&B) was the leading category in terms of number of new retail transactions (12) as well as total square footage leased at nearly 22,000 square feet,” said the report.
“Notable transactions include Alpha’s Shawarma securing approximately 3,000 square feet at 245 Yonge Street and Poulet Rouge leasing nearly 2,700 square feet at 360 Queen Street West.
“The average availability rate for the 11 retail corridors tracked by JLL decreased to 8.26 per cent, the lowest figure since the inception of this report. King Street West (Spadina to Bathurst) had the highest percentage of available retail space at 18.42 per cent, while Ossington Avenue (Queen to Dundas) had no availability as of June 30, 2024.
“Average Asking Rents across Toronto’s 11 retail corridors decreased to $91.58 per square foot, led by Bloor Street at $219.92 per square foot and followed by Yorkville Avenue (Yonge to Avenue) and Queen Street West (John to Spadina) at $102.50 and $90.50 per square foot, respectively at $107.50 and $100.57 per square foot, respectively.”
