Canada Retail National Report

Vacancy sparse across food-related categories. Consumers’ prioritization of necessity goods, dining and experiences remained intact during 2024, supporting a moderate shift in demand for single-tenant retail space. Entering 2025, segment vacancy sat at 4.5 percent, which is 100 basis points below the sector’s long-term average. This metric, however, is skewed by recent drug stores closures and department store dark space, as vacancy in other single-tenant categories — convenience stores, fast food, restaurants and supermarkets — ranged from 1.0 percent to 3.7 percent at the onset of this year. Despite these scant rates, net absorption across each of these segments eclipsed the 2 million-square-foot mark last year, reflecting encouraging leasing and renewal activity. While this would appear to warrant a rise in single-tenant construction, the sector is on pace to add less than 30 million square feet for a fourth straight year, much of which is built-to-suit. The combination of minimal supply-side pressure and continued consumer resiliency — grocery stores, bars and restaurants noted record spending this January — should continue to reinforce positive leasing velocity, aiding property owners attempting to backfill space and retain tenants.