Retail rents held steady in the first half of what’s been a tumultuous year for Canadian consumers, merchandisers and mall landlords. CBRE Canada’s newly released survey of nine retail formats across 11 regional markets finds relatively little rent slippage during the first six months of 2025, along with a little bit of upward momentum in the open-air community shopping centre and neighbourhood plaza categories.
Tariffs, counter-tariffs and insolvency of the Hudson’s Bay Company (HBC) all slammed into the retail landscape in the first quarter of the year, but CBRE analysts conclude market dynamics have “rebounded to a more neutral stance” since then. Leasing has continued, albeit at a somewhat more cautious pace, and they report ongoing tenant demand, particularly in the health and wellness, fitness, grocery and restaurant sectors.
“With the notable exception of HBC-anchored shopping centres, supply of quality retail space remains constrained,” maintains Alex Edmison, a senior vice president, and Christina Cattana, research manager at CBRE. “The space left by HBC will take some time to be leased, but we are seeing healthy levels of interest and leasing activity around the majority of the locations.”
Regional mall rents stayed generally consistent with the levels achieved in the second half of 2024 across all 11 markets CBRE surveys — ranging from a high of $175 to $200 per square foot (psf) in Toronto to a low of $40 to $50 psf in Winnipeg.
Waterloo is flagged for having lost HBC anchors in three different regional malls throughout the region southwest of the Greater Toronto Area, but landlords everywhere are expected to be strategic about how they bring the vacated space back to the market. Big box tenants are seen as potential takers.
“There is strong interest in the majority of these boxes; however most will take time to absorb as landlords contemplate plans and realign the centre to match the long term vision for their shopping centres,” notes CBRE senior vice president, Matthew Jackson.
Upward trends in open-air retail rents were recorded on the prairies, in Calgary, Edmonton and Saskatoon, and in Toronto. Retail landlords likewise enjoyed some gains in Toronto’s power centre and mixed-use urban markets — with the latter also containing a repositioning story.
Edmison suggests downtown office space can be a good fit for health and wellness enterprises, including fertility services, cosmetic enhancement clinics, preventative health services and conventional health practitioners.
“Health and wellness operators benefit from a relative cost advantage to most other retailers,” he observes. “Although still capital intensive, these facilities are often less complex and costly to build, enabling growth for brands that are eager to expand.”
