Canada Retail Rent Survey H1 2026

Canada’s retail market performed well over H1 2026, with suburban fundamentals proving particularly strong. Vacancy across key formats, especially among grocery-anchored centres, remained tight, supported by sustained population growth in select geographies and consistent tenant demand. Available space is effectively at capacity in several high-growth corridors, prompting a slight uptick in retail development activity in select cities.

Demand has continued to shift toward service-oriented uses, including medical, fitness, personal services, and QSR operators who are among the most active across the country. Experiential and entertainment uses are also being added to the tenant mix, often offering creative solutions to backfilling large-format vacancies.

Near-term headwinds remain in select markets. Return-to-office adoption continues to shape confidence in urban retail and is strongly linked to the pace of recovery in downtown cores. While Toronto has led this trend, momentum is beginning to turn in other markets, particularly where revitalization efforts have been put in place. Supply has also remained constrained, limiting options for growth.

Overall, rental appreciation was noted in 28 of the total 131 format types or key urban areas captured in this survey along with 8 decreases. All format types experienced at least one increase across Canada, with Toronto and Winnipeg noting the highest number of increases on a by-market basis.

Luxury & Apparel

Canada's luxury and apparel sector is undergoing a notable shift in composition. Traditional luxury groups have pulled back on new leasing activity amid macroeconomic uncertainty and softening confidence among aspirational shoppers. In their place, athletic and athleisure brands are capturing premium retail space in the country's top corridors, competing aggressively for flagship locations in urban markets. Mid-tier contemporary brands are also gaining ground, occupying space previously reserved for heritage luxury names. Looking ahead, pent-up demand from luxury groups is expected to resurface as conditions stabilize.

Health/Wellness

Demand across the health, wellness and medical sectors continues to grow, driven by both public and private operators expanding their physical footprints. Healthcare providers continue to recognize the value of strategically located real estate and how it improves patient access while expanding their patient base and brand presence. At the same time, medtech companies are recognizing the importance of physical space, not only for research and collaboration, but also to create environments that enhance customer engagement, clinical partnerships, and long-term growth opportunities.

Necessity

Businesses that serve everyday needs are driving a significant share of leasing activity, including grocery, pharmacy, childcare, medical, pet care, wellness, and convenience-based concepts. These categories benefit from recurring spending patterns that are less susceptible to short-term economic fluctuations, providing operators the confidence to expand in more uncertain environments. Many are moving earlier to secure strategic locations, particularly in high-growth suburban markets where the supply of prime retail sites is increasingly limited. The challenge today is not finding tenants, but finding enough quality locations to accommodate demand.

Food & Beverage

Persistently low vacancy at high-performing centres is driving creative growth strategies across food and beverage. Acquiring and converting existing restaurants has increased as a route to market, allowing operators to secure space and avoid high construction costs. Meanwhile, QSRs continue to push through squeezed margins from the rising cost of rent, labour, and food through menu innovation and loyalty programs. Notable activity includes recent brand acquisitions by Happy Belly and Foodtastic, alongside aggressive expansion from McDonald’s, Tim Hortons, Shake Shack, and Jersey Mike’s.

The suburban market recorded 60,000 sq. ft. of new supply in the first half of 2026 with strong pre-leasing activity sustained by developer and tenant confidence in emerging suburban nodes.

The federal government's return-to-office mandate is expected to bolster Downtown Victoria's daytime population, supporting increased pedestrian traffic and benefiting retailers that rely on office employee spending.

Highstreet vacancy tightened ahead of summer as new retailers entered the market, capitalizing on higher foot traffic from the FIFA World Cup and an anticipated record-breaking cruise ship season.

Metro Vancouver's retail market remains relatively healthy, with stabilized vacancy rates across major retail formats, primarily urban highstreet nodes and grocery-anchored centres.

Fundamentals are expected to remain favourable in the near term as the market works through a period of limited new supply following the completion of Oakridge Park and Simons committing to 92,000 sq. ft. at Nordstrom's former Pacific Centre location.

Stagnant population growth, muted job growth, and weakened consumer spending have tempered activity across the market, contributing to slower leasing. However, limited availability of quality inventory has largely insulated landlords from these economic headwinds.

Retailers are becoming increasingly selective in urban mixed-use environments. Traditional suburban centres meanwhile continue to outperform due to stronger parking, visibility, and customer accessibility.

Calgary’s suburban retail market remains one of the strongest in Canada. Vacancy in many growth corridors is effectively full, with the South, Southeast and North Central quadrants continuing to post exceptionally tight availability as retailers pursue rapidly growing residential trade areas.

Grocery-anchored developments are leasing well in advance of completion. Demand remains strongest from value-oriented grocers, food service, medical, fitness, childcare and service-based retailers seeking access to expanding suburban populations.

As Edmonton's downtown enters an exciting new chapter, fresh opportunities are emerging for businesses seeking a place in the heart of the city. The National Bank Centre is nearing completion of its podium, with anticipation building for the dynamic mix of tenants expected to bring new energy to the area.

The suburban retail market continues to thrive, fueled by population growth and new development across the region. Strong tenant demand is keeping vacancy rates moderately low.

Edmonton’s retail landscape continues to expand, with many established shopping centres undergoing significant growth and reinvention. Through thoughtful expansions, these mature retail destinations are being revitalized to meet the evolving needs of their communities.

Saskatoon retail remains constrained, supported by resilient regional growth and continued population gains. While broader consumer spending has become more cautious, quality suburban and eastern retail nodes continue to command stronger rents, with construction and fit-out costs still influencing new development.

Retail fundamentals have held tight. Demand is strongest for well-located suburban space, particularly from convenience, childcare, quick-service restaurant, pharmacy and service-oriented tenants.

Growth in Saskatoon's east side has continued with activity concentrated around Brighton, Rosewood, Aspen Ridge, and surrounding suburban nodes. New residential growth and commercial developments within each of these key areas should support additional retail services and help absorb demand in the area.

Qualico has begun work on expanding Sage Creek Village in Southeast Winnipeg. The new expansion has secured a national grocery and fitness anchor tenant with tenant possession planned for late 2027.

Winnipeg is seeing an uptick in retail development as tenant demand remains strong. Out-of-market brands looking to enter the market desire modern, high-visibility product of which there is low availability in the city.

United Equities is developing a mixed-use site just north of the city limits in the RM of West St. Paul. Already generating regional draw with an operational McDonald’s, the site’s status will be solidified by an upcoming ±162,000 sq. ft. Costco.

Waterloo City Council has approved zoning for three new grocery stores at 663 Erb Street W (Waterloo Commons), 388 Phillip Street, and 200 Weber Street N. In total, these stores could add up to 130,000 sq. ft. of new grocery space across the city.

UNIQLO, the Japanese apparel brand, is slated to open in Conestoga Mall. This is part of a larger expansion for the retailer which plans to open five stores across Canada this fall.

A lack of new retail development is keeping lease rates stable. Current demand meanwhile is coming from non-goods retail uses like pharmacy/medical, fitness/recreation, and personal services.

Toronto's downtown core is benefiting from a strengthening office market, as rising return-to-office rates support weekday foot traffic and demand for food-and-beverage and service-oriented retail.

Luxury home furnishings retailer RH is set to open at the corner of Bloor Street W and Avenue Road, occupying Club Monaco’s former flagship. This will be the third location for the retailer in Canada.

Athleisure brands are increasingly defining the Mink Mile. As vacancy tightens along Bloor Street W, attention is shifting to adjacent streets in Yorkville and Ossington.

Yorkdale’s luxury wing extension continues to welcome tenants, cementing its status as a top destination for premium international brands. Flagship openings include Dior, Moncler, Tom Ford, and Saint Laurent, with Gucci to follow.

Ottawa’s retail market is polarized: suburban vacancies remain scarce and highly desirable, meanwhile vacancy remains high downtown. Despite increased tenant inquiries downtown and in ByWard Market, deal activity remains in a holding pattern, with many waiting to see if the Federal Government’s return-to-office strategy is successful.

Ottawa is seeing increased demand for large-block spaces (10,000–30,000 sq. ft.). Completed transactions, while taking longer to finalize, are dominated by medical, entertainment, and service providers, reflecting a shift in consumer interest toward experiential and specialized uses.

New retail developments are being planned with a focus in the south end of Ottawa. However, developers are prioritizing residential projects, relegating commercial expansion to a secondary role.

The market is showing broad-based resilience, albeit in distinct ways. Suburban nodes are benefitting from all-time low vacancy, especially for quality space. Downtown activity meanwhile is driven by experiential retail.

The revitalization project on Sainte-Catherine Street West continues to influence one of Montréal’s tightest retail corridors. Flagship relocations and sustained demand from national and international retailers are happening outside of active renovation zones, leading to a constrained number of options for lease.

The latest phase of Sainte-Catherine revitalization will shift west in September. This ongoing initiative will replace aging infrastructure and enhance pedestrian spaces by introducing greenery, while improving safety and traffic flow.

Investment activity is holding steady in Quebec City, particularly among retail properties that are grocery-anchored and offer essential services.

New supply has been extremely limited in the city, translating to low vacancy. This has applied upward pressure on rental rates.

Total retail space per capita has been trending downwards in the region since 2018 due to supply not keeping pace with population growth. This has led to higher profitability with a larger population spending across a smaller portfolio of businesses.

Halifax's retail market is one of the strongest in Atlantic Canada, driven by strong population growth and a steady consumer base. Vacancy remains low across most major retail nodes, and well-located space is leasing quickly, creating a competitive environment.

Retailers continue to focus on highly visible locations with the majority of activity coming from quick-service restaurants. Increased demand from national retailers has been noted for malls and high-profile streets in the past six months.

Local retailers and food and beverage operators are seeking space in densely populated residential areas, with traffic congestion creating a demand for retail locations closer to consumers’ homes.