Canadian Retail Properties Perform Well in the First Half of 2026

Suburban fundamentals excelled in key retail formats, especially grocery-anchored centres, supported by population growth in select cities and consistent tenant demand, according to CBRE’s new survey

Canadian retail properties performed well in the first half of the year, with suburban fundamentals proving particularly strong, according to CBRE’s new H1 2026 Retail Rent Survey. Vacancy has remained tight across key retail formats, especially grocery-anchored centres, supported by sustained population growth in select cities and consistent tenant demand.

Available retail space is at capacity in several high-growth corridors, prompting an uptick in retail development in select cities. Demand has continued to shift toward service-oriented uses, including medical, fitness, personal services, and Quick Service Restaurants (QSR). Experiential and entertainment uses are providing creative solutions to backfilling large-format vacancies.

“While trade issues will have an impact on Canadian consumer sentiment, the long-term trajectory for our retail sector is strong,” says CBRE Senior Vice President Alex Edmison. “Toronto is leading the country on the return to office trend, creating new momentum there and in other downtown cores across Canada, particularly where revitalization efforts have been put in place. Supply of retail space has also remained constrained, limiting options for growth.”

Rental appreciation was noted in 28 of the total 131 format types or key urban areas captured in the CBRE survey, along with eight decreases. All format types experienced at least one rate increase across Canada, with Toronto and Winnipeg logging the highest number of increases.

Here are the most active and growing segments for 2026:

• 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 economic uncertainty and softening confidence among aspirational shoppers. Athletic and athleisure brands are capturing premium retail space in top corridors, competing for flagship locations in urban markets. Mid-tier contemporary brands are also gaining ground, occupying space previously reserved for heritage luxury names.
• Health/Wellness – Demand across the health, wellness and medical sectors is being driven by both public and private operators expanding their footprints. Healthcare providers see the value of strategically located real estate and how it improves patient access while expanding their client bases and brand presence. Medtech firms recognize the importance of physical space for research and collaboration, and to create environments that enhance customer engagement, clinical partnerships and 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 concepts. These categories benefit from recurring spending patterns that are less susceptible to short-term economic fluctuations, providing operators the confidence to expand in uncertain environments.
• Food & Beverage – Low vacancy at high-performing retail centres is driving creative growth strategies among food and beverage operators. Converting existing restaurants is enabling operators to secure space and avoid high construction costs. QSRs continue to push through squeezed margins with menu innovation and loyalty programs. Notable activity includes recent brand acquisitions by Happy Belly and Foodtastic, alongside expansion from McDonald’s, Tim Hortons, Shake Shack, and Jersey Mike’s.

Some notable retail trends to watch for in markets across Canada:

• Vancouver – Local retail fundamentals are expected to remain favourable amid a period of limited new supply following completion of Oakridge Park and Simons taking 92,000 sq. ft. at Nordstrom's former Pacific Centre location. Stagnant population growth, muted job growth, and weakened consumer spending have tempered activity, contributing to slower leasing. But limited availability of quality inventory has insulated landlords from economic headwinds.
• Calgary – The city’s suburban retail market is one of Canada’s strongest. The South, Southeast and North Central quadrants have exceptionally tight availability as retailers pursue rapidly growing residential trade areas. Grocery-anchored developments are leasing well in advance of completion. Demand is strongest from value-oriented grocers, food, medical, fitness, childcare and service retailers seeking access to expanding suburban populations.
• Edmonton – As downtown Edmonton enters an exciting new chapter, fresh opportunities are emerging for businesses seeking a place in the heart of the city. 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 vacancies moderately low.
• Toronto – The downtown core is benefiting from strengthening return-to-office rates, which support weekday foot traffic and demand for food-and-beverage and service retail. Luxury home furnishings retailer RH is set to open at Bloor Street and Avenue Road. As vacancy tightens along Bloor St. W., attention is shifting to adjacent streets in Yorkville and Ossington. Yorkdale’s luxury wing has cemented its status as a destination for international brands, with openings including Dior, Moncler, Tom Ford, Saint Laurent and soon Gucci.
• Montreal – Suburban nodes are benefitting from all-time low vacancy for quality space and downtown activity is driven by experiential retail. The Sainte-Catherine Street West revitalization continues to influence one of Montreal’s tightest retail corridors. Flagship relocations and sustained demand from national and international retailers outside of renovation zones are leading to constrained leasing options.