There's no space available in Kelowna for furniture stores and others that need large retail spaces.

Image Credit: PEXELS

During the COVID-induced real estate boom over the past couple of years, housing and industrial markets were swamped with buyers pushing up prices.

With COVID restrictions and fears, the retail sector suffered.

“As the world has come out of that, we’re finding that the retail business and interest in the retail node and retailers – people looking for retail spaces – is actually, right now, one of the busiest sectors,” Stephen Webber, associate vice-president of Colliers in Kelowna, told iNFOnews.ca. “It just feels like people are wanting to get back to normality and to get back out and have a human touch and just be out there again.”

While there’s currently a 4.2% vacancy rate in the Kelowna retail sector, there are clients needing 3,000 to 5,000 square feet for things like flooring, furniture and pet stores but those spaces just aren’t available.

Webber negotiates leases for the Capri Centre Mall and can’t accommodate those clients there. Orchard Park Shopping Centre is similarly filled and the Dilworth Shopping Centre is going to cut back on retail space and replace it with housing.

READ MORE: Chunk of Dilworth mall in Kelowna could be levelled to make way for housing

While there’s lots of new residential construction with small commercial spaces in them, they’re being quickly snapped up. In fact, some clients are already lining up for retail space in the UBC Okanagan downtown campus tower that won’t open until 2026.

There are only four retail listings in Vernon and five in Penticton.

“We are seeing a number of people coming along wanting 10,000 square feet and we can’t accommodate them so where do they go?” Webber said. “That’s the question and the crux of it for them.”

It’s at the point where there’s likely to be a shift to light industrial areas like the Airport Business Park for those kinds of spaces. The business park, across Highway 97 from the airport, is zoned to allow for such retail outlets.

But it’s going to take a couple of businesses to make the jump in order to create a retail hub, just as a number of construction-oriented companies have set up shop there.

And it’s really not that far to drive if there are a few shops to visit.

“We’ve been so used to having more of a small-town mentality and people have been able to find space, on Enterprise or Banks and Baron or wherever,” Webber said. “Those spaces are really difficult to come by now.”

He expects something to start happening there late this year or early in 2023 but it will take at least a year for it to be “populated” out there.

With the demand, prices are steadily climbing.

Not that long ago he sold two retail units in the Ellis Parc tower next to Prospera Place, totalling 6,000 square feet. They sold fairly quickly and, for the first time, broke the $500 per square foot sales ceiling.

He expects UBCO to sell for more than that and space along Clement Avenue, which is technically industrial, is selling in the $525 range.

When it comes to leasing space, prime areas like downtown Kelowna are going for $50 a square foot. Those prices drop the further businesses go from the core areas and can be as low as $10.

The available spaces in Penticton and Vernon are leasing in the $12.50 to $25 per square foot range, Webber said.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

We welcome your comments and opinions on our stories but play nice. We won't censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in comments, email the editor in the link above. 

News from © iNFOnews, 2022