Retail vacancy rates jump in Regina following Sears closure

The bankruptcy of Sears has had a significant impact on Regina’s retail vacancy rates, according to Colliers Regina’s latest report.

With the stores closure, it has added 266,000 square feet of additional retail vacancy onto the market increasing 4.59 per cent, the highest point in recent memory.

“Generally speaking, we have a fairly healthy retail sector here in Regina,” Regina & District Chamber of Commerce CEO John Hopkins said. “We’ve seen Sears close here as well as across the country and that’s had an impact and added a lot of space.”

“Yet beyond Sears, the city’s retail market has remained strong with new growth and stable rates. In fact, without Sears, the vacancy rates would have dropped to rates lower than 2016,” the report said.

“When you look at the market place, Regina continues to do very well and we continue to draw people from the southern part of the province,” Hopkins said.

South Regina continues to grow with increasing new development over the past year. In total Grasslands added 70,000 square feet of new retail or 64 per cent of the total new construction for the city.

While north Regina has seen less momentum, the northwest continues to have the lowest vacancy in the city. The area is currently seeing the development of Capital Crossing, a large-scale retail and mixed-use development.

“The east has remained the single most important site for national and international retailers looking to locate in Regina,” the report said.

However, the vacancy rate has risen to 4.58 per cent, 32 per cent of which can be attributed to Sears Home leaving their site and the closing of Home Outfitters has added some vacancy as well.

In total over 130,000 square feet is available to tenants in the east, which according to the report is expected to be absorbed in the next 12 months. Future development includes a 68 acre shopping centre with 678,000 square feet of retail space.

Even though the downtown has the highest rate of retail vacancy, 75 per cent of that can be attributed directly to Sears.

“Some of the restaurants that have closed or the businesses that have closed do have new tenants and are in the process of doing some fit outs within the space,” Executive Director Regina Downtown Business Improvement District Judith Veresuk said. “So while it looks vacant now, there are plans for the space.”

Going forward, Regina will begin to absorb the extra space left behind by Sears. New stores like H&M are already scheduled to open and it is expected that will attract even more new tenants in 2018.