Brand new Metro Vancouver retail spaces scheduled to complete in 2023 will contribute to a strong year for B.C.’s retail real estate market, according to CBRE’s Retail Rent Survey.
Additions to the sector, including the Post in downtown Vancouver and the expansion of Willowbrook Mall in Langley, are already generating “significant leasing traction,” said CBRE in their survey findings.
“Despite economic headwinds, retail and retailer sentiment remains positive across Canada,” CBRE senior vice-president Alex Edmison noted in a release.
“With an array of new retail developments cropping up across Canada, the stage is being set for a robust 2023.”
Within Vancouver’s downtown core, foot-traffic levels are still below pre-pandemic peaks. This continues to drive up vacancy rates, which remain slightly elevated. The suburban market, meanwhile, is seeing some renewal in activity in areas anchored by grocery tenants and connected to transit hubs, according to CBRE.
As B.C. continues to see a slowdown in the residential housing market, some mixed-use developments with retail components have been put on hold.
“Construction cost challenges and higher interest rates continue to impact leasing. Tenants and landlords are working together to get deals done in the current cost environment,” said CBRE in the survey findings.
Nationally, all cities west of Winnipeg reported retail rent increases, with Vancouver and Saskatoon leading the charge. Both markets saw increasing rates in six rental formats or key urban areas.
The net asking rental rate for the area around Alberni Street, identified by CBRE as a key urban area, is $195 to $300 per square foot. Robson Street prices are lower, with the current net asking rental rate at $120 to $185 per square foot.
Metro Vancouver mixed-use urban retail space ($65 to $90 per square foot) and suburban retail space ($60 to $90 per square foot) have roughly the same net asking rental rate.
Despite economic headwinds, sentiments within the retail sector remain positive throughout the country for 2023, says CBRE.
