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Market Report

Vancouver Retail Market Report

3Q 2023

Retailers Compete for Limited Space Amid Supply Crunch;
Vacancy Set to Reach New Low

Healthy demand persists across the metro. In the first half of 2023, Vancouver’s retail sector continued to show resilience amid rising interest rates. Net absorption reached nearly 600,000 square feet, far outpacing the pace of construction. This compressed Vancouver’s vacancy rate to 1.0 per cent in the second quarter, the lowest level on record. While elevated inflation and rising borrowing costs softened total retail sales growth, spending at restaurants and bars in the first five months of the year increased 15 per cent year-over-year in British Columbia. This was aided by pent-up demand from both domestic consumers and a rising number of international visitors, which supported the urban retail market. The suburban market also remained strong as consumers continued to pivot toward essential retail. For the remainder of 2023, while consumer spending may moderate from the current level as the economy absorbs the full impact of past interest rate hikes, an elevated level of immigration and a booming tourism sector will help solidify the metro’s consumer base and maintain healthy retail sector fundamentals.
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