Although the Covid-19 vaccine rollout has been successful, the economic rebound has been unequal and fragile. Supply chain woes, labour shortages, and high inflation (CPI) are all potential threats to continued economic growth. Interest rates have increased substantially in 2021 when compared to year-end 2020, and the Bank of Canada is expected to begin raising its Overnight Lending Rate in the second half of 2022.
- Work-from-Home and return to office plans are key to the health of the office sector. Employer flexibility and hybrid return plans are the way forward. The downtown vs suburban debate is back, but reversed. It was easier to follow talent downtown compared to trying to follow talent out of the vast suburbs.
- The retail rebound is unequal, with labour shortages impacting operating hours. Supply chain issues and inflation, along with rising debt levels continue to impact discretionary spending, creating a drag on retail sales.
- Demand for industrial space remains exceptionally strong, with e-commerce, grocery, film production, increasing manufacturing, ghost kitchens, and shifts in supply chain manage from Just-In-Time (JIT) to Just-In-Case (JIC) driving demand for space.
- ESG is increasingly a priority for landlords, occupiers, investors, and lenders. Climate change and severe weather are driving up the costs of maintenance, insurance, and construction,