Edmonton Retail Market Report
Vacancy Drifts Higher Amid Increasing Supply;
Downtown Continues to be a Weak Spot
Vacancy to tick up slightly, due to inventory expansion. In Edmonton, leasing activity bore the brunt of rising interest rates in the second half of 2022. Net absorption briefly dropped into negative territory in the third quarter and remained at subdued levels entering 2023. Limited new supply last year capped upward pressure on vacancy; while this year, spending has held up well as consumers digest higher interest rates. A robust labour market and elevated population growth helped fuel purchases, boosting retail sales growth in Alberta to the fastest pace in Canada during the first five months of 2023. Leasing demand, as a result, improved quickly in the second quarter, which helped stabilize the vacancy rate. Although net absorption is expected to remain healthy for the remainder of the year, there will be a notable inventory expansion that will put slight upward pressure on the vacancy rate.