Capital investment in the retail real estate sector totaled $6.9 billion in 2013, says a report released by the Real Property Association of Canada (REALpac). It says $4.7 billion was spent on new buildings, with $2.2 billion invested in capital improvements, renovations and the upgrading of existing buildings.
“As a real estate asset class there is no better investment than really great retail and you will continue to see smart owners enhance and reinvest in these assets,” says Blake Hutcheson, president and CEO, Oxford Properties Group. “This is what our tenants and customers want and the payback is convincing for both owners and the economy at large.”
The ongoing operations of retail buildings also generated about $1 billion in building management fees and approximately $1 billion in commercial brokerage fees from sales and leasing of retail real estate sector properties.
Taken together, the construction and investment in retail buildings and the ongoing operation of these buildings make a substantial contribution to the Canadian economy, producing $18.3 billion in annual economic activity. REALpac says these activities add to the economy in various ways by:
- Supporting 97,700 jobs each year, many of which are high-paying professional jobs;
- Generating $6.0 billion in income, related to personal income and other sources of income;
- Generating $3.9 billion in corporate profits earned by many small and medium companies and some of the largest companies in Canada, such as pension funds and insurance companies; and
- Contributing $2.2 billion in personal and corporate income tax revenues for the federal and provincial governments.
