Key Insights
- Retail reports positive momentum, with a 4.1% year-over-year increase, the highest among the four major asset classes.
- Grocery-anchored assets provide stability to investors, delivering high-occupancy, necessity-driven foot traffic and secure cash flow from creditworthy long-term tenants.
- Macroeconomic trends favour the sector, as hybrid work, barriers to entry for new supply, and resilient consumer demand strengthen grocery-anchored retail as we head into 2026.
This holiday season, one notable and fitting insight from PwC’s 2026 Emerging Trends in Canadian Real Estate was the growing investor preference for retail assets, with landlords reporting strong tenant demand and rising rental rates as indicators of continued opportunity in this sector.1 This is a welcome sign for an asset class which had investors wary not too long ago. Having reported the strongest positive momentum, 4.1% year-over-year, out of the four major asset classes, 2026 looks to be an exciting year for retail asset transactions.2
The Appeal of Grocery-Anchored Retail Assets
Within the broader asset class, grocery-anchored retail has emerged as the most prominent. This property type showcases high occupancy levels, due to its essential nature and the steady, necessity-driven foot traffic it generates. Surrounding retailers also benefit from the perceived security and built-in customer base that a grocery anchor provides. These attributes make it an increasingly competitive property type for investors looking for defensive risk, especially in uncertain economic conditions. As such, it is no surprise that grocery-anchored retail has had the highest quarters momentum ratio for the past 7 consecutive quarters.3
Chart 1: Property Type Barometer – Q3 2025
Source: Altus Group3, Peakhill Capital
Although grocery-anchored retail is top of mind for investors today, this hasn’t always been the case. During the pandemic, these assets traded at higher cap rates and lost much of their appeal to commercial real estate investors. In contrast, today’s macroeconomic conditions are supporting valuations for this asset type. Hybrid work models, which encourage in-home dining, limited new construction due to inflated costs to build, and high occupancy rates because of grocery’s essential nature4, make these properties increasingly attractive to investors, and as a result, competitive to acquire. “Speaking with investors, everybody’s looking for grocery-anchored retail, which obviously bids up the price,” as noted by the Director of Valuation Advisory at Altus Group.5
“Grocery-anchored retail in Canada remains highly competitive due to its ability to deliver stable, needs-based consumer traffic. Most grocery tenants operate with strong credit profiles and long-term leases, providing landlords with secure and durable cash flow and low vacancy risk. These tenants are seen as a true necessity, which makes them appealing to all demographics.”
Peakhill’s Grocery-Anchored Retail Experience in Canada
As 2025 comes to a close, grocery-anchored retail positions itself as a highly sought-after investment opportunity. Its combination of steady consumer demand, tenant stability, and resilience in the face of economic fluctuations solidifies it as one of the most resilient retail assets heading into 2026. With grocery stores planning to expand operations in 2026 to meet consumer demand, opportunities await investors looking to capitalize on this asset class.
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Footnotes
- PwC. 2025. Emerging Trends in Real Estate 2026. ↩︎
- Altus Group. 2025. Canadian CRE valuation analysis – Q1 2025. ↩︎
- Altus Group. 2025. Canadian CRE Investment trends – Q3 2025. ↩︎
- RENX. 2025. Grocery anchored centres “still the most in-demand retail asset”. ↩︎
- Globe and Mail. 2025. Why investors can’t get enough of grocery-anchored retail. ↩︎
This article is for information and discussion purposes only. The contents of this article are not to be construed as investment, legal, business, or tax advice. Peakhill does not provide tax advice. Please consult with a qualified tax professional or financial advisor to understand how any investment decision may impact your individual tax situation. If any information related to the contents of this article, or regarding Peakhill’s corporate strategy and organization, is provided at any time, orally or otherwise, such information is provided as a convenience only without representation or warranty as to its accuracy or completeness and should not be relied upon without independent investigation and verification. All investments carry risks, and past performance is not indicative of future results.
