Demand for retail space is bouncing back in some Vancouver neighbourhoods: report

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The retail landscape has been one of boarded-up windows, double-digit vacancy rates and discussion of empty store taxes, but now there’s talk of a few green shoots.

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Demand for retail space is bouncing back in some Vancouver neighbourhoods: report Back to video

One commercial real estate broker is homing in on specific blocks of streets to see where there are tight vacancy rates and why. Meanwhile, some hardy entrepreneurs have started new businesses far from these locations and are trying to buck the trend by drawing online customers.

A few months ago, Louwella Malda and Kyle Roberts launched The Filipino Noodle Joint in a Chinatown mall on Keefer Street that has one of the highest vacancy rates with only about five of its 18 shop spaces occupied. Some customers live in nearby condos, but the couple is focused on enticing others with a lively Instagram presence that features giveaways, contests and fun videos of bubbling spaghetti sauces and freshly topped sisig bowls.

“We’re trying to create a presence,” said Malda.

Retailers are selling different products in slightly different ways and, beyond a physical store, they need to build awareness with an online base, said Madeline Nicholls, senior managing director at Colliers Vancouver.

“There is no doubt, a lot of retail has suffered and even, unfortunately, disappeared during the pandemic. It’s a great shame in many ways, but it has opened opportunities for a new wave of retail to come in. It’s important to acknowledge that, as much as there have been casualties, there are also opportunities,” she said.

Colliers recently looked at 13 retail areas in Vancouver to see where there is demand for retail space and why vacancy rates are lower even with many negative factors in the mix, including rising inflation, constructions costs and recessionary times.

“We looked at certain blocks on the streets, not entire streets,” said Nicholls.

In some areas, recovery has been uneven from one block to another. For example, on Robson between Thurlow and Burrard streets, there is still solid demand with the vacancy rate at only 2.2 per cent and median net rents between $180 to $240 per square foot a year. But one block over, between Thurlow and Bute streets, where a transition in tenants was been happening before the pandemic, the vacancy rate is much higher at 9 per cent and rents are lower at between $75 to $125 per square foot a year.

Overall, looking at these parts of the strongest retail streets in various areas of Vancouver, the Colliers index found that the average vacancy in these urban settings was a low 2.5 per cent.

“We are seeing from clients, both landlords and tenants, that there is demand for certain nodes that have foot (traffic) and are close to a higher density of residences.”

The lowest retail vacancies in Colliers’ index were posted from Kerrisdale at 0.0 per cent, Davie Village at 0.89 per cent, Cambie Village at 1.04 per cent and Yaletown at 1.3 per cent.

Main Street in Mount Pleasant from East Broadway to East 16th Avenue is an in-demand area with vacancies at 2.65 per cent and where rents before the pandemic were around $50 per square foot and now are in the $60 to $70 per square foot a year range.

Colliers notes that the downtown core, Chinatown and Gastown “suffered some of the largest swings in vacancy” during the pandemic and are still impacted by people working from home as well as a drop in tourism and conferences.

jlee-young@postmedia.com

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