Space is tight for retailers and restaurant owners looking to open stores in Metro Vancouver, despite developers building more space.
Those wanting large floorplates have even fewer options.
The most high-profile large site waiting to be redeveloped is at Cadillac Fairview’s CF Pacific Centre, where 230,000 square feet has sat vacant since Nordstrom Inc. (NYSE:JWN) left last June.
“These things take time,” Cadillac Fairview senior vice-president of retail Lillian Tummonds told BIV.
“Nothing is confirmed.”
She said her company has spoken with potential tenants that want to lease all of the space, as well as some that want to lease part of the space.
“What we really want is to make sure that we have the right merchandise mix for the mall,” she said.
This could mean that in the future the space would be leased to multiple tenants, including retailers, restaurateurs and those operating businesses that provide non-retail and non-food experiences.
Little space is available elsewhere at CF Pacific Centre, Tummonds added.
Victoria’s Secret (NYSE:VSCO), which in January vacated a 35,000-square-foot flagship store at the corner of Robson and Burrard streets, is set to open a much smaller, new store at CF Pacific Centre on a lower-level corridor, between Purdys Chocolatier and Skechers, across from H&M (STO:HM-B).
Colliers International vice-president Sherman Scott told BIV that low vacancy is the norm across the region.
He collected data in December for his most-recent retail report, and found a 3.9-per-cent retail vacancy rate in Vancouver.
The real vacancy rate, however, was much lower than that because some spaces were leased but not yet occupied.
Scott found that the weakest retail strip in Vancouver in December was Gastown, where vacancy was at 10.3 per cent.
“Social issues,” such as more homeless people on the streets and the area’s proximity to the Downtown Eastside, keep Gastown from attracting tenants, even as the City of Vancouver makes efforts to improve the neighbourhood.
The city set aside $10 million to improve Gastown, including Maple Tree Square, and it temporarily closed traffic to parts of Gastown during road reconstruction.
This city’s plan this summer is to have a pedestrian-only zone on Water Street, between Richards and Cambie streets – an area that includes the steam clock.
Scott said the retail corridor with the second-highest vacancy rate in December was Robson Street, between Thurlow and Bute streets, at 8.13 per cent.
(Image: Colliers International vice-president Sherman Scott is the broker for space to lease on Robson Street | Chung Chow)
Much of that vacancy has been filled.
Scott’s report included empty space at 1145 Robson St., where a Milestones restaurant previously operated. Swatch last year signed a lease for that space, and it opened its watch store earlier this year.
Scott’s report also included 1136 Robson St. as being empty, but, according to Marcus and Millichap senior vice-president Martin Moriarty, Vancouver restaurant company 808 Management Corp. – which operates Vancouver’s Mott 32—has leased that space and plans to open a new-concept restaurant.
The only vacancies in the block are now 1176 Robson and 1160 Robson, according to Scott and Moriarty.
Further east on Robson Street, Adidas (ETR:ADS) is readying to occupy the former Victoria’s Secret space.
Across Burrard Street, on the northwest corner, at Robson Street, Arc’Teryx is set to replace longtime tenant Roots Corp. (TSX:ROOT), Retail Insider owner and consultant Craig Patterson told BIV.
He added that Arc’Teryx plans to leave its location half a block east of Robson Street, on Burrard Street, and Peak Performance is set to lease that space.
BIV asked Arc’Teryx and Peak Performance to confirm these moves. Peak Performance said in an email that “we don’t have any official announcements regarding new store spaces in Vancouver.”
Arc’Teryx did not respond.
“Downtown Vancouver retail is strong but it has struggled a bit with not all people returning to work in offices, and there being higher office vacancies,” Patterson said.
“Cruise ship traffic is coming back but the Chinese tourists haven’t come back. They are a fraction of what they were and that means less demand for retail in the downtown core.”
Nonetheless, other Vancouver retail hubs have low vacancy.
Alberni Street’s vacancy rate in December was 2.54 per cent, while Davie Street between Burrard and Jervis streets was 1.17 per cent. Kerrisdale, on West 41st Ave. between West Boulevard and Balsam Street, was one per cent, according to Scott’s December research.
New Vancouver developments provide opportunities
One major project rapidly filling is Quadreal Property Group’s The Post, bounded by West Georgia, Hamilton, Dunsmuir and Homer streets.
Loblaws City Market opened Feb. 2, while the project also houses the 35,000-square-foot gym Evolve Strength and a Starbucks. Eateries, such as a Gong Cha bubble tea shop, Deville Coffee and the Brazilian restaurant Fogo de Chao, are set to open later this year.
A food hall at the site is also in the works.
Oakridge Park is Quadreal’s other major Vancouver development.
The company’s executive vice-president of Canadian retail, Chrystal Burns, told BIV more than 100 tenants are set to lease space at a future 650,000-square-foot mall, set to replace the decades-old 573,920-square-foot mall known as Oakridge Town Centre.
Louis Vuitton, Prada, Brunello Cucinelli, Moncler, Versace and Max Mara are some of the luxury brands planning to open in the rebuilt mall.
Upscale fashion brands opening their first stand-alone stores in Metro Vancouver at Oakridge Park are set to include Maison Margiela, Miu Miu, Christian Louboutin and Alexander Wang, Burns said.
The mall’s previous main anchor tenants – the Bay and Safeway – are each planning to downsize their footprints but will each be prominent in the new facility, she added.
Suburban retail space is scarcer than in Vancouver
Colliers International data shows vacant space at suburban grocery-store-anchored retail developments is even more scarce than at Vancouver shopping hubs: Vacancy was 0.75 per cent in December.
New suburban development includes Quay North Urban Development renovating Lonsdale Quay in North Vancouver.
Cadillac Fairview is expanding its CF Richmond Centre, and Tummonds said that its expansion will make the site’s retail footprint larger than the one at CF Pacific Centre.
BIV’s 2023 list of the province’s largest shopping centres pinned CF Pacific Centre’s leaseable retail space at 712,000 square feet, whereas CF Richmond Centre had 638,989 square feet.
New retail space at CF Richmond Centre is set to be at the bottom of new residential towers built on the 60-year-old mall’s longtime parking lot.
Shape Properties has similarly been building residential towers with ground-level retail on previous parking lots at two Burnaby malls: The Amazing Brentwood and the City of Lougheed.
It owns Amazing Brentwood with Healthcare of Ontario Pension Plan (HOOPP) and L Chatterton Real Estate, while its City of Lougheed has other co-owners.
Shape’s senior vice-president of retail, Maria Holly, told BIV that the Amazing Brentwood’s first phase, dubbed Neighbourhood 1, has three occupied residential towers that combine to have 80,000 square feet of office space and 380,000 square feet of retail space.
“The retail is 95 per cent leased,” she said.
One major tenant is Earls, which opened last year.
Some distinctive openings that are the first ones that brands have opened in the region include Rivian’s electric-vehicle store and a 7,000-square-foot H&M Home store, which sells furniture and homeware.
That H&M Home store is connected to a 22,600-square-foot H&M clothing store, but also has its own entrance.
Amsterdam-based Suitsupply plans to open its first Metro Vancouver location this summer in a 5,650-square-foot location, said Holly.
“New tenant openings include a 10,000-square-foot Tap and Barrel: a three-level restaurant with a rooftop patio, on April 9,” said Holly.
China-based Haidilao plans to open a 9,000-square-foot hot-pot eatery on April 1, she added.
Other new tenants at Amazing Brentwood include a 1,841-square-foot Hello Nori sushi bar and a 20,574-square-foot Evolve Strength gym. Jinya Ramen recently opened a 2,225-square-foot noodle bar.
“Bow and Stern is opening this summer in about 5,000 square feet,” Holly said, referring to what is primarily a seafood restaurant chain.
The Canadian Imperial Bank of Commerce (TSX:CM) is building a new 11,168-square-foot bank to replace its current approximately 8,500-square-foot bank within the mall. The Bank of Nova Scotia (TSX:BNS) is relocating and expanding to 7,082 square feet from about 5,500 square feet, Holly said.
Shape’s Neighbourhood 2 is under construction. It is slated to have two residential towers that each have about 60,000 square feet of retail space at ground level, none of which is yet leased.
“Those towers don’t open for four years,” Holly said.
“We’re taking letters of interest at this point.”
The site was known for decades as Brentwood Town Centre—an interior mall that opened in 1961. Holly said Shape’s plan is to close that mall portion of the Amazing Brentwood on April 1, 2025, although the London Drugs store would remain open.
An information session about the site’s future is slated for April 2, when residents can learn about potential redevelopment that would need public and city council approval.
Suburban retail real estate has enjoyed higher demand since the COVID-19 pandemic took hold four years ago this month, forcing suburban workers who may have regularly worked downtown to work at home.
“Mondays and Fridays are a bit quieter as people will work from home, and then might come into their offices on Tuesdays, Wednesdays and Thursdays,” Patterson said.
“People are shopping and consuming closer to home so that’s why suburban retail seems to have roared back stronger and is outperforming what things were like before the pandemic.”
