Market Trends

Several market trends intersect and affect the pace of commercial development of the municipality

First, there is the scarcity of spaces to develop. For many municipalities, the time horizon for commercial land absorption remains below five years. Recognition of this reality makes it necessary to examine market opportunities to identify the uses most relevant to urban development. Prudence remains in the assessment of opportunities. Indeed, the method of the best and the highest use is interested in the performance of the real estate owner. It is rather the urban perspective that must take precedence in this analysis.

We observe that these available spaces may be subject to competition between commercial uses and, sometimes, between other urban functions. The scarcity of space makes critical the presence of real or anticipated market saturation in all types of businesses.

Then, the regulatory constraints that take the form of a PMAD (Metropolitan Planning and Development Plan,) of the CPTAQ (Commission for the Protection of the Territory), development plans and other conditions of management of the space (landscape charter, protected areas, and others) influence the availability of space for development. These constraints take different forms such as objectives of reaching density, conditions of sustainable development, and mixed urban functions.

Then, there is municipal taxation. The income elasticity of residential taxation reaches a limit where other sources of income must be identified. However, Demarcom’s numerous analyses of the commercial function demonstrate the existence of a commercial leak recovery potential that, if materialized, can help increase commercial real estate potential.

Finally, there is a decrease in the commercial efficiency of the free market. Indeed, the issues of development and commercial coherence require the municipality to be more actively interested in commercial projects proposed on its territory. Private investors must be regularly supervised to ensure the successful integration of their projects into the urban fabric. Moreover, the extent of the regulatory arsenal of municipalities bears witness to this: Special Planning Program (SPP), Comprehensive Development Plan (PAE), Site Planning and Architectural Integration Plan (PIP) and many others.

These market trends evolve at different speeds and generate varied effects. The local context explains the diversity of effects observed and felt.