Montréal retail insight

• The availability rate decreased to 2.4 percent in late 2024 from 2.7 percent mid-2024, affecting every property type and class. Effective rent growth moderated.

• General retail, community centres, and super-regional malls contributed most to net absorption.

• Royalmount’s 824,000 s.f. was the biggest completion in 2024.

   

Demand for retail space surpassed supply in the second half of 2024, leading to a significant reduction in available space. General retail, community centres, and malls contributed most to demand, while outlet, strip, and community centres demonstrated the largest reductions in availability. Montréal’s availability rate dropped to 2.4 percent, 30 basis points lower than mid-2024.

The tightening of the Montréal retail market is widespread, occurring across property types and classes. Most geographic areas, including downtown, saw reduced available space. Montérégie, West of Montréal, and Plateau-Outremont were major contributors to this reduction.

The annual growth of effective rent moderated from 3.9 percent in 2023 to 1.1 percent in 2024. Although Montréal’s rental growth lagged the national average of 2.1 percent in 2024, its five-year growth remains stronger. Royalmount – Midtown’s new mixed-use development of 824,000 s.f. – contributed to a significant increase in 2024 completions.

Apparel & accessories have led in mall openings, with Mejuri, Lovisa, and Mango opening in Carrefour Laval. Nike also opened in Quartier Dix30, and Adopt at Galeries d'Anjou. Cineplex opened five theatre auditoriums and its first Québec Rec Room in Royalmount in November.

Overall foot traffic continues to increase. Public transit ridership is now above 80 percent of pre-pandemic levels, and the number of YUL airport-screened passengers in 2024 was up 8 percent from 2019 ─ one of the best recoveries in Canada. Downtown pedestrian traffic should also benefit from an increase in office-based employment this year.

Montréal demonstrates a robust retail real estate market, with moderating rental growth, quickly decreasing available space, and lower construction levels. Although restaurant spending growth should taper off in 2025, Montréal's retail sales are expected to accelerate with a boost in per capita spending. However, slowing population growth and potential impacts from U.S. tariffs might limit any upside. In the long run, retailers will benefit from Montréal’s GDP growth, which is expected to be faster than the national average.