Despite unending tariff threats putting stress on retailers, fears of inflation, and a decrease to the population in British Columbia (B.C.), Metro Vancouver retail continues to be a resilient asset class, according to Colliers’ Greater Vancouver Retail Report, Mid-year 2026.
“Urban and suburban retail vacancies are slowly, but steadily, decreasing across the GVA while the average monthly retail sales in BC are steadily increasing month after month going into the second half of the year,” said the report.
“With a new developer for the former downtown flagship Hudson Bay Company space, retailers will wait and see on what will be done in the massive retail space with a heritage component. Opportunities may align for the space especially during a time historically low vacancy and new entrants entering the Metro Vancouver market. Overall projections for the rest of 2026 are optimistic with long tailed effects from FIFA World Cup 2026 increasing consumer spending even further.”
As of mid-year 2026, the Urban Retail Colliers Index Vacancy Rate is 2.96%, down from 2.99% at year-end 2025. Meanwhile, the Suburban Retail Colliers Index Vacancy Rate is 0.65% down from 0.81% at mid-year 2025. Average monthly retail sales for B.C., reported by Statistics Canada, were up 3.4% year-over-year (YoY) to $9.9B as of May 2026 and up 4.5% from October 2025 showing healthy growth in consumer spending. With data yet to be released during the World Cup months and the lingering effects from the event; these figures may see a significant bump. These results show the retail sector maintaining its momentum from the end of last year, explained the report.
Following the end of Hudson’s Bay Company (HBC) 355-year reign in Canadian Retail, 15 million square feet have been left vacated across Canada. In Vancouver, HBC left a 620,000 square feet void in the heart of downtown, said Colliers.
“Recently, Onni Group bought the former HBC space with undisclosed plans for the site. Typically, with previous large vacated spaces, landlords have subdivided its space for multiple tenants. However, with the added challenge given that the building has a heritage component, it remains to be seen what Onni may do with the site,” said the report.
“While there may not be any immediate plans shared with the public in the near future, it will be worth monitoring to see what sort of retail plans are in store for this historic landmark. With a massive new vacated space in a premium downtown location, there may be new opportunities for new entrants or existing GVA retailers looking for a downtown location.
“Vancouver Retail is in mid-transition, with a huge legacy anchor space being reconsidered, street level demand especially downtown remains strong enough to absorb new entrants at a rapid pace.”
Even though uncertainty from factors such as constantly changing tariffs, a deepening affordability crisis, and a shrinking population are wearing away at the confidence of people and business owners, retail remains resilient, said Susan Thompson, Director, Research, Colliers Canada.
“Vacancy rates for key urban retail streets and grocery-anchored shopping centres continue to tick down and are at historically low levels. Average monthly retail sales are up in British Columbia over the last six months, according to Statistics Canada data, new entrants continue to set up shop across the Metro Vancouver region, and the retail industry continues to evolve and reinvent itself as new opportunities come up.”
Thompson said consumers are showing a continued desire to shop near their residences with no sign of changing anytime soon, which is contributing to historically low vacancy rates.
“The recent end of the 355-year legacy department store Hudson’s Bay operations across Canada has left over 15 million square feet vacant, including a 620,000 square foot void in the heart of downtown Vancouver at their former flagship location. However, like many of these locations across the country, opportunities to reimagine these spaces into new retail experiences and/or mixed-use developments are being pursed. Onni Group recently bought the former downtown Vancouver HBC space with undisclosed plans for the site, but it is believed that they have grand plans for a master planned site given the size and prime location, even with the added challenge of a heritage designation on the property and SkyTrain tracks running directly underneath.”
Thompson noted that the population in Canada and B.C. is expected to contract in late 2026 and into 2027 for the first time in decades as the effects to changes in national immigration policy play out. However, even with a reduced population, personal disposable income and retail sales are expected to shrink by less than half a per cent, showing that consumers are spending similar amounts, if not more than usual before inflation, making up for the loss of spending from the slight decrease in provincial population.
Thompson said Vancouver recently wrapped up its FIFA World Cup 2026 hosting duties, with the last game played at BC Place on Tuesday, July 7. Over the course of the event, hundreds of thousands of fans from all over the world filtered through Vancouver to take part in match day festivities.
“Overall projections for the rest of the 2026 tourist season are optimistic with long-tailed effects from the event increasing consumer spending. With several of the master planned communities with significant retail components
completing or at the finish line (Oakridge Mall, Sen̓áḵw, Concord Metrotown, etc.) the development pipeline is starting to constrict, leaving few options for new or expanding retailers,” she said.
“Other massive projects remain in their planning phase while waiting for macroeconomic conditions to improve. However, due to the strength of retail, many smaller mixed-use projects are still in the pipeline. With retail sales increasing despite provincial population loss, urban and suburban retail reaching historic lows, and long tailed effects from a strong tourism season anchored by FIFA World Cup 2026 match hosting, retail in the GVA is poised for a strong year-end finish.”
More from Retail Insider:
