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Build, Baby, Build: Alberta Bucks National Retail Trend
April 16, 2025 5 Minute Read
Unlike Americans, Canadians have fewer places to spend their hard-earned money. Conservative construction practices have kept a lid on retail expansion – until now.
Robust demand for retail space across Canada drove vacancy rates to record lows and retail rental rates to new heights in the second half of last year, according to CBRE’s H2 2024 Retail Rent Survey. A lack of retail construction starts since 2021 means this space crunch could continue to affect Canadian retail markets for the foreseeable future.
Meanwhile in Alberta, the tide is turning. After three years of stifled retail supply growth, developers in Wild Rose Country are finally ready to put shovels back into the ground.
“2024 was the worst year for retail development since we started tracking construction activity,” says CBRE’s Alistair Corbett, who leases retail space in Calgary and Southern Alberta. “But we’re finally seeing developer interest recover, which is good news for businesses and shoppers.”
Calgary had 650,000 sq. ft. of retail construction underway in the second half of 2024, up from a record low in the first half of that year. “Our team is back in transaction mode as substantial retail projects are currently at the permitting stage,” Corbett says. “We’re about to see major development projects hit the pipeline in 2025.”
Lots of Land
One of the main hurdles for new retail development is the cost of land. Land scarcity in cities like Vancouver or Toronto drives prices up and forces developers to build vertically to maximize space. But that’s not the case in Alberta, where available land is more plentiful.
“Alberta is relatively unconstrained from a land perspective so our prices are more competitive,” Corbett says. “There’s a push for densification close to downtown Calgary, but less so outside the core.”
Calgary is in a unique situation as a handful of developers already own much of the land surrounding the city. These builders often have residential and commercial arms so they can build communities with carefully curated amenities and services.
Corbett is representing Brookfield Residential in leasing the retail portion of their Market Street mixed-use development in Seton and was recently awarded the listing on their 110,000 sq ft grocery anchored site in Livingston. “These developers have a long-term vision and spend years carefully planning communities,” he says. “We help them execute on the retail portions.”
Timelines in retail development can be long. A case in point is Jomaa Ltd.’s West Springs Landing, a development with 92,000 sq. ft. of retail on Calgary’s west side where Corbett’s team finalized 23 deals in December after having worked on the project for a decade.
Other notable retail projects under construction include Luxuria Homes’ Belmont Village shopping centre in southwest Calgary, Royop Development Corp. is underway with Munro, a mixed-use development in the Winston Heights neighbourhood and Dream is getting ready to start construction on their Alpine Park development in the southwest. Local developer Truman Homes also has several retail projects on the go across the city.
Alberta’s Winning Trifecta
Alberta’s retail sector has benefitted from record immigration and interprovincial migration over the last few years. Calgary’s population grew by over 6.1% between 2023 and 2024, and 17.5% over five years. Edmonton’s headcount increased by 5.7% year-over-year and 15.4% in the last five years.
This has led to record housing starts and strong demand for shops and services in new neighbourhoods and developments. While mixed-use spaces have historically been a hard sell for Albertan retailers, which preferred conventional spaces on the city’s outskirts, more are beginning to take up these traditionally challenging spaces as retail options remain limited.
Corbett says that although retail tenants have recently had to recalibrate their space and pricing expectations, Alberta’s market remains competitive. He expects the province’s retail momentum to carry forward into the next few years.
“Alberta has what it takes to support retail sector growth: good sites, good tenants and good rates,” he says. “Soon we’ll have more places to shop, and with no provincial sales tax we encourage the rest of the country to come to Alberta and to bring your shopping lists.”
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