An initial casualty of the Covid-19 outbreak — commercial rents — rebounded slightly in the third quarter as the economy inched open.
According to new data from Statistics Canada, commercial rents rose 0.7% in the third quarter, as physical distancing requirements were relaxed and companies began restarting operations.
Office rents rebounded the most, rising 1.0%, while rents for industrial buildings and warehouses were up 0.6%, and retail rents rose 0.5%, the statistical agency reported.
“The increase in commercial rents in the third quarter reflected the gradual ending of rent relief and abatement that began in the second quarter. The increase also coincided with an improving labour market, as more Canadians were employed in the third quarter,” StatsCan noted.
The rise in Q3 followed a record decline of 1.8% in the second quarter, StatsCan said.
However, that second quarter dip was revised from an initial reading of a 3.1% drop — after late responses were added to the data, and after the subsidies that businesses received were factored in too, the agency noted.
Those supports included the Canada Emergency Commercial Rent Assistance program, which lowered rents by 75% for qualifying small businesses. That initiative ran from April to October, when it was replaced by the Canada Emergency Rent Subsidy (CERS), which is in effect until June 19, 2021.
Ontario led the rent rebound in Q3, with commercial rents there rising by 2.1%, driven by a 2.9% gain for retail buildings as well as a 2.3% surge for warehouses and industrial buildings.
StatsCan reported that commercial rents also rose in the Atlantic provinces and Manitoba, but were flat in Quebec and British Columbia.
Rents continued declining in Alberta, down 2.4% in Q3, and in Saskatchewan, down 0.3%.
Despite the recovery in Q3, rents remain down 0.8% year-over-year. StatsCan noted that, historically, commercial rents tend to rise an average of 1.6% year-over-year in the third quarter.