Marcus & Millichap

Vancouver Retail Market Report

Second Quarter 2018

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Solid Retail Performance Fuels Exceptional Tenant and Investor Demand

Rising international status attracts a mix of retailers. One of the nation’s lowest unemployment rates along with robust household formation trends are driving outsized performance in the Greater Vancouver Area’s retail sector, carrying the market through 2018. Needs-based retailers stand to benefit greatly as 33,000 households are estimated to be formed this year, while rising tourism numbers are fueling demand for luxury retailers, marking a tight vacancy rate in some of the most trafficked areas. Leasing activity among all types of retailers has been on the rise and will continue this year, supporting a moderate drop in the vacancy rate.

Development strong in less expensive suburban areas. High land and construction prices have pushed developers to concentrate more on suburban locations, with areas beyond the core accounting for the majority of new supply this year. Much of the new space coming online is in the form of large to mid-size shopping centers and ground-floor retail attached to residential towers, spaces that can integrate a connective shopping experience. The largest project opening this year is the 80,000 square foot retail portion of the Kensington Gardens mixed-use development in Vancouver, which includes a grocery store.

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