Metro Vancouver saw a multimillion-dollar shopping spree by investors snapping up retail assets this year before the province began to lift restrictions on store openings.
A number of major retailers also took advantage of the COVID-19 calm – and discounted lease rates in some centres – to stake out and expand in the region, data shows.
On July 1, under Step 3 of a four-phase ‘restart plan’, B.C. ended year-long restrictions on provincial health orders that had limited the capacity and hours at retail outlets.
But, for many retailers, the traffic had already returned, according to a study by Cushman & Wakefield.
“Google data shows that, as of the end of June, Metro Vancouver was just 3 per cent below normal traffic for destinations including restaurants, cafes [and] shopping centres,” the agency reported July 28.
The Marketbeat report also noted that at least 10 notable brands, including Dollarama, Herschel Supply Co, Peloto, Athleta and Lucid Motors had all either expanded or opened retail outlets in Metro Vancouver while restrictions were still in place.
As well, before July 1 at the Amazing Brentwood shopping centre in Burnaby, Cineplex completed a new 21,000-square-foot movie theatre and retailer The Rec Room finished a new 44,000-square-foot outlet, noted leasing manager Helen Rego.
She added that Nike, Adidas, H&M and Sepora have all taken space this year in the Amazing Brentwood's 450,000-square-foot expansion.
As of May, latest figures available, retail sales in British Columbia had averaged more than $8 billion a month for five straight months.
Metro Vancouver retail sales in May, at $3.7 billion, were up 34.5 per cent from the same month a year earlier.
This is the largest year-over-year increase of any city in Canada, according to Statistics Canada.
Retail asset investors have been piling into the Metro Vancouver market for months, apparently brushing aside fears of a bricks-and-mortar retail demise.
Those fears had seemed real a year ago, when average lease rates fell from 5 per cent to 10 per cent during the first months of the pandemic as most stores shuttered or reduced hours during the pandemic.
“But, as the focus shifts to 2021, activity and rates are returning to what one would expect in this historically resilient market,” Cushman & Wakefield noted.
On May 12, weeks before restrictions lifted, the 42,000-square-foot Nordel Centre shopping centre in Delta sold for $21.3 million, nearly $3 million over its BC Assessment value, reports the Fraser Elliott Group, which brokered the deal.
Other big sales in the first half of this year included the 81,000-square-foot Lougheed Super Centre in Coquitlam, bought in a share-sale worth $42 million; and an assembly of three retail properties on Victoria Drive at East 49th in Vancouver, totaling 45,257-square feet, that sold for $42.5 million.
In the second quarter, Skyline Real Estate Investment Trust paid $31.4 million for a 71,800-square foot Abbotsford shopping centre; and a private investor bought the 34,781-square-foot Rodeo Square in Surrey for $23.3 million.
There has also been an increasing number of storefront retail assets and strata retail sales across the City of Vancouver, based on Western Investor Done Deals listings.
“Economic recovery is ramping up [in Metro Vancouver] and can be expected to gain significant momentum through the second half of 2021,” the Cushman & Wakefield Marketbeat retail report concluded.