While overall sales and consumer confidence increased over the second quarter of 2011, both foreign and domestic economic challenges continued to be felt in Metro Vancouver’s retail marketplace.

The retail vacancy rate has risen to 3.4% since the end of 2010. With low urgency on the part of retailers, the leasing market has been slow, despite several new major retailers entering the market (Kohls, Marshalls, Target). Landlords have begun to lower their expectations, and as a result there are deals to be had for prudent tenants.

Since last year, a significant decline in the retail investment market has been seen, despite a significant lack of supply. Real Estate Investment Trusts (REIT’s), as well as institutional investors have been noticably less active in the marketplace.

Looking forward, there remains a fair amount of uncertainty in the market. Investors will continue to focus on other asset classes, consumer confidence is expected to continue improving, and leasing activity should see a marginal increase as new retailers continue to enter the Metro Vancouver market.