Changes in shopping change how tenants fill Vancouver’s retail space

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Longtime owner of two Zazou Hair Salons in North Vancouver, Bruce Peters is looking for a completely different and larger retail space.

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That’s what he hopes will become an Uber-like business, where dozens of beauty professionals rent space and offer their services in one location of about 6,000 square feet. Ideally located in an outdoor strip mall with parking and transportation access for customers, hairdressers, nail technicians, massage his therapists, major grocery stores and large retail stores. will be

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Customers who haven’t fully returned this Urbana Beauty Village shop to their downtown offices and are sticking to their “essential business” of buying food and essentials are curbing other spending. Nonetheless, it aims to make this store available. Inflation and rising interest rates.

“The big advantage is really in the cost. You’re not in a situation where you’re in East Vancouver or Downtown Vancouver and you’re all in for $100 per square foot. No,” says Peters. “It needs to be cost effective.”

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His change comes as real estate firm Colliers describes a “recalibration” of the retail market. A newly released retail report says the vacancy index for suburban locations like the one Peters is looking for fell from 2.3% to 1% in mid-to-late 2022. It has been.

“It’s very difficult to find such a space right now,” said Sheldon Scott, executive vice president of Colliers, which specializes in suburban commercial real estate.

He analyzes opportunities for Peters starting in North Van, then Burnaby, Coquitlam, Port Coquitlam, Langley, and considers South Surrey and Delta.

At the same time, Colliers’ vacancy index for urban areas, including downtown Vancouver and boulevards, rose from 2.6% to 4% over the same period. The highest vacancy rates were part of Albani Street at 9.57%, Robson Street between Thurlow and Bute at 15.43% and Gastown at 7.65%.

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These spots cost between $50 and $85 per square foot, with a $70 per square foot rate compared to other High Street locations such as Vancouver’s West End, Yaletown, and Mount Pleasant. to $240.

“Last year was very busy from January to August,” said Sherman Scott, Colliers vice president of urban leasing. “After that, things tapered off.”

The 4% vacancy rate remains a healthy number, but he added that the number of people returning to downtown offices has not returned to pre-COVID-19 levels. And many retail tenants, helped by government loans, have not fully recovered.

“A lot of my work over the past six months has been backfilling previous restaurants and gyms that unfortunately didn’t work out,” says Scott.

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Ironically, many of the new businesses coming in, which are also restaurants and gyms, don’t have the accumulated debt to close previous tenants, he said.

“Hybrid work is not yet solved for all companies. They are still investigating how it will work for their employees. What day?” Colliers Senior Managing Director Madeleine Nichols said. “Downtown is probably back to 60% of pre-pandemic traffic and occupancy.”

Nicholls said retail spending on big-ticket items such as home improvement, garden landscaping and furniture is shifting to fashion, cosmetics and personalized services such as hair and nails. Even if I’m not fully back at work in the office, I still meet friends and colleagues at restaurants and celebrate with them.

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Colliers said fashion spending across Canada has increased by 27% from last year to date as sectors such as auto dealerships and electronics stores struggle, with the clothing and fashion sector seeing surprising growth. .

jlee-young@postmedia.com

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