Ali Amiry, the owner of Boutique Bijoux D’Orient, is facing difficulties keeping his business afloat during the winter.
“It’s very bad nowadays for the rent, for the business, the traffic is very slow. Winter is also the worst time of the year,” he says.
Located at the heart of downtown on Ste-Catherine Street and Stanley, the Boutique has been open for 15 years but is struggling to make ends meet.
This small and local business, which was previously situated on Bishop Street, sells traditional Middle Eastern decorations, gifts, and clothes.
“The rent is too high on Ste-Catherine,” Amiry says. “We’re shutting down that’s it. We’re not opening any other business because of too much stress. I got sick, real sick– physically sick,” he added.
Amiry clarified the rent wouldn’t be an issue if people were buying.
However, downtown Montreal is currently facing a business turnover, where some businesses are closing and others are taking advantage of available spaces to open their stores.
According to Michel Leblanc, President and CEO of the Montreal Chamber of Commerce, overall the city is ldoing well.
“What we have to keep in mind is that we are in a trajectory,” says Leblanc.
“You always have in an economy a turn in businesses. You have businesses that close, and you have businesses, new projects and new entrepreneurs,” Leblanc added.
The Canadian Market Reports’ (CBRE) retail rent survey from February 2023, concludes that the demand for retail space has rebounded.
Christopher Rundle, Associate Vice President of CBRE Quebec notes that rental rates have also increased in the suburbs while they have slightly decreased downtown.
The pandemic affected the office market because the return to office affected the retail day-to-day sales.
“Suburban retailers are doing the best that it’s ever been because people shop where they live and where they’re working from home,” says Rundle.
A lot of people complain about the landlord rates, but the City is increasing taxes significantly.
Key urban areas such as Ste-Catherine Street West, have rental prices ranging from $150 – $175 per square foot (PSF).
According to Statistics Canada, Montreal’s commercial rents increased by 3.7 per cent between the end of 2020 and the end of 2021. However, commercial rents only increased by 1.1 per cent in the final quarter of 2021. In contrast, prices rose 6.2 per cent In Edmonton for the same quarter.
“The actual rents in downtown are not increasing, what is actually increasing are the taxes. What’s going in the pocket of the landlords is actually less than what is going inside the pocket of the City,” says Rundle.
“A lot of people complain about the landlord rates, but to be honest the City is increasing taxes significantly,” he added.
According to Montreal’s 2023 budget, taxes in the city will climb by an average of 2.9 per cent for non-residential buildings.
According to Statistics Canada, the commercial rents services price index (CRSPI) has slightly increased. CRSPI measures monthly changes in the net effective rent for the occupied commercial building space in Canada.
Leblanc explains that some businesses change their opening hours to adapt to the slow winter traffic.
“Businesses do not know what they will need in a year from now. Some are growing, and expecting more people, and probably more space,” he says. “Others are saying ‘I’m just re-organizing my work, and working two days a week in the long term.’ And some people are envisioning reducing their space.”
Rundle also agrees that downtown’s business demographic is changing with new businesses opening while others close.
“Out with the old, in with the new. Nike for example is coming to downtown. We have people coming from all across Canada or internationally because there are opportunities,” says Rundle.
Leblanc further explains the change in the downtown business demographic by highlighting the turnover in certain areas of Montreal.
“Ville-Marie was a place of consulting firms, and lawyers, now is attracting tenants that are more innovative sectors, that are sometimes sharing spaces. So it’s a new dynamic in downtown,” he says. “At this moment, you will probably see some closures. You will have available rent in very good spots. So for new entrepreneurs or new entrepreneurs with new projects, there are possibilities to start in an area where in the past, you wouldn’t have had the availability of space.”
Privé, located next to the Boutique Bijoux D’Orient, is one of the businesses profiting from sharing a space.
Since opening in 2021, Privé combines three different businesses. Privé, which is exotic snacks and drinks, partnered with City Styles, a streetwear clothing store, and La Section, a barbershop.
Privé’s owner Gianny Giguere says their landlord has been helpful as they set up the space.
“This space is temporary because we’re renting another space next to H&M, it’s a basement. And it was supposed to be ready in March, but since it’s getting delayed, they offered us this in the meantime at a good price,” he says. “We tried renting a lot of empty spots that have been empty for a couple of years, and they only want big stores like H&M, not small businesses like ours. It depends on who you’re dealing with.”
While some new businesses are taking advantage of empty spaces around Montreal and getting profitable deals from their landlords, others are not so fortunate.
In December 2022, Nilufar restaurant closed overnight due to a sudden rent increase.
The eatery’s name comes from Nilufar Al-Shourbaji, the owner of many Concordia University students’ favourite vegan middle eastern restaurant.
After the discussion and refusal to agree to the new price, Al-Shourbaji’s landlord gave her 60 days to evacuate.
“I’m not going to pay the same lease as somebody that’s opening in 2023, I’m going to pay the lease as someone that opened in 1994 with regular increases, not 40 per cent over, 30 per cent over,” says Al-Shourbaji.
“It’s really important for both the tenant and the landlord to communicate,” says Martin Messier, President of the Association des Propriétaires du Québec (APQ). “To try to establish the best way to proceed because we don’t want to see tenants in problems and then to be facing empty spaces.”
“If the building is doing well and well located but there is one of the tenants that is facing difficulties, it’s not always the market, sometimes it’s the business side,” says Messier. “But when it’s the area that’s facing difficulties then we need to try to find a solution and that’s by talking to each other.”