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As an unforgettable 2020 draws to a close, most of us will be happy to move forward to better days. With that in mind, we’re speaking with CBRE’s market leaders to find out what commercial real estate trends they’ll be watching for in their cities in 2021.
Andrew Bergen, CBRE Atlantic Canada Managing Director, sees the tech sector bolstering the local office market, supply constraints posing challenges for industrial and multi-res continuing its great run.
I’m actually bullish on office for 2021. More people will be returning to the workplace and I think that bodes well for demand. And in Halifax we have a strong tech sector and I see increased demand coming from that sector, as well. People will eventually be back in the office and looking at growth opportunities. Occupiers will be evaluating, what is our future requirement, who is in the office and who is working remotely? We’ll still be going through that transition in the new year but I think things will become more clear in the next 12 months.
I see the market fundamentals on industrial remaining fairly strong over the next 12 months. We are going to feel the supply crunch even more. In order to deliver the next phase of growth in the industrial market we need to see more supply to accommodate demand. We need to push forward with more new development to spur growth opportunities for existing companies. There is essentially no new space; we’re sub 6% vacancy and haven’t had any significant new supply in 2020, so that's really the push: the market is craving the next wave of development.
Retail is a wild card, it’s hard to know what 2021 will look like. Despite some businesses being able to pivot and be creative over the last 8 to 10 months, we’re at the point now where unfortunately some local businesses and restaurants aren’t going to make it, that’s just the reality. Given current restrictions and uncertainty, I think a lot of small businesses and restaurants won’t be able to weather this for another 4 to 6 months. And by summer we’ll probably lose a lot of restaurants and shops; perhaps upwards of 25%.
We’ve been on a great run for the last number of years and I see that continuing in 2021. Demand is there, though population growth is down this year due to lower immigration. But in the long term Atlantic Canada is positioned extremely well. We’ve seen people migrate here from other markets and in pursuit of new opportunities. Additional tech opportunities in Halifax and the lower cost of living here are factors that bode well for the multi-res sector.