Canadian Grocery-Anchored and Necessity-Based Shopping Centres Poised for Growth in Post-Pandemic Environment

DBRS Morningstar published a commentary on the growth prospects for REITs with grocery-anchored and necessity-based shopping centres, in a post-Coronavirus Disease (COVID-19) environment.

Key Highlights:
-- Grocery-anchored and/or necessity-based shopping centres maintained, and in some cases increased, their historically strong occupancy rates throughout the pandemic, supported by quality tenants and their positions in high-density, high barrier-to-entry markets.
-- Those shopping centres also were able to maintain positive growth in same-store net operating income during and after the pandemic, helped by stay-at-home mandates and long-term leases.
-- Rising sales, in combination with grocers' overall solid operating performance and balanced capital management practices, generally strengthened the credit risk profiles of grocers in our portfolio within their respective rating categories.
-- We expect the REITs’ partnerships with some of Canada’s top grocers to remain in place and continue to contribute positively to their credit risk profiles.

“As retailers are offering more ways for consumers to shop and driving more foot traffic to their shopping centres, we expect this segment of retail will remain strong through the high inflationary environment,” says Jason Tam, Assistant Vice President, Real Estate.