All categories of retail are affected by shifting economic outlooks and changing consumer spending patterns. However, each sub-category of retail, including open-air retail, enclosed malls, and street-level retail, are affected in different ways.
Open-air retail – which includes strip malls, neighbourhood centres, and big box stores – takes centre stage in the latest report from Colliers. Along with vacancy projections and the impact of declining consumer confidence on performance, we survey tenant sentiment on holiday sales projections, opportunities to drive profitability, and priorities for lease renewals. To analyze our portfolio, we surveyed a stratified sample of tenants across our 8 million square foot national retail portfolio.
- Open-air retail vacancy is expected to decline 1-2% over the next two years, outperforming overall retail vacancy rates.
Source: MSCI and Colliers
- Necessity retail – the largest percentage of open-air retail tenants – will continue to excel over the next two years, despite declining consumer confidence. A decline consumer confidence does not impact necessity retail as significantly as non-necessity retail.
Source: Nanos, Bloomberg, and Colliers
- 41% of open-air retailers are interested in engaging with the owner and manager on initiatives to drive greater profitability, which could include strengthening their online presence.