Retail rents were particularly buoyant on Canada’s coasts and in the prairies during the second half of 2025, while generally holding steady in many of the 11 major regional markets CBRE Canada surveys. Rarer downward trends were almost entirely confined to urban shopping districts where smaller-sized, street-front venues prevail.
In a panoply of 120 different combinations of retail formats and regional markets nationwide, average rents rose in 37 cases and fell in eight. Vancouver, Saskatoon, Winnipeg and Halifax all saw rents increase across the majority of retail formats over the course of last summer and fall. Meanwhile, regional malls and select urban shopping districts continue to command the highest rents in every market.
“Sector-specific demand remains strong for fitness and wellness services, particularly in Ontario and Western Canada. In Calgary, physician recruitment initiatives have driven a notable increase in demand for medical clinics, while Edmonton is seeing success in backfilling large-format vacancies,” notes commentary from CBRE Canada’s senior vice president, Alex Edmison, and research manager, Christina Cattana. “Saskatoon and Halifax, meanwhile, are benefiting from rapid population growth and a scarcity of available space.”
Enclosed mall landlords have been focused on repositioning anchor space that has emptied due to Hudson’s Bay Company’s (HBC) bankruptcy, along with a spate of large format store closings by struggling chains such as Toys R Us, Linen Chest and JYSK. In some cases, new tenants such as Canadian Tire, Mark’s, Sport Chek and TJX have now signed leases. Elsewhere, new entertainment uses are contemplated, while some landlords are physically altering or demolishing former large boxes to make room for smaller retail units.
Occupiers confront tightening supply given the continued sluggishness of most types of new retail development other than grocery-anchored plazas, and the more recent drop-off in new starts of mixed-use or residential condominium projects with street-level retail space. Leisure space that’s already outfitted for food and beverage operations is likewise in high demand due to high construction costs for new build-outs.
Consumer demographics also play a key role. Notably, the slow return of federal government workers to formal office settings makes downtown Ottawa one of the more problematic markets for retail operators, while downtown Victoria is the beneficiary of a pickup in cruise ship dockings.
“When you drill into the numbers, retail performance continues to be highly situational. Local demographics, tenant mix and economic drivers can make or break retailers,” Edmison submits. “Strategic tenant relocations continue in response to these dynamics, particularly for flagships in high density areas.”
