The redevelopment of the former Hudson’s Bay Company store in downtown Calgary is likely to contain a retail component, says a Barclay Street Real Estate broker.

Joshua Gill, a senior associate said in an interview that the proposed buyer, Astra Real Estate, has developed retail components with mixed-use residential projects elsewhere in the city.

“Based on the projects that are ongoing in the city, they are very much having a retail component to their developments. To say that is a likelihood? Absolutely,” said Gill, who specializes in retail leasing and investment sales.

An Ontario court has approved the Astra’s proposed purchase of the property located on Stephen Avenue Mall (Eighth Avenue S.W.) from a RioCan-HBC joint-venture as the once iconic department-store chain winds down its business due to unmanageable debts. The deal is expected to close by the end of July.

Astra, the parent of People First Developments, is primarily a residential property developer, and the site is expected to be repurposed according to the company’s specialty.

Although the former Bay site’s redevelopment will remove a large amount of the city’s retail real inventory from the market, the project could be a “game changer” for the surrounding office buildings and multi-residential buildings along Stephen Avenue if activated with “the right mix.”

He noted that the property sits on “a very prime corner” of the Eighth Avenue S.W. and First Street S.W. intersection, “but the challenge remains on what the developer ends up doing in their plans.”

Gill made his comments following the release of Barclay Street’s local second-quarter retail real estate report.

As Connect reported recently, Calgary’s retail real estate sector continues to demonstrate resilience and momentum, says the new report.

The city’s retail real estate market remained one of Canada’s strongest in the second quarter, with overall occupancy holding at 97.0% and vacancy staying near historic lows as luxury retailers, restaurants and U.S. brands continued to expand into the city.

Gill said quick-service restaurants and other service-based retailers are taking up spaces at much higher rents than they were in the past two years due to increasing demand. Elaborating on his comment in the report that the market is booming, Gill said the main factor is that retailers are enjoying record-high sales.

Based on Barclay Street’s conversations with clients, he said, the increased sales are resulting because Calgarians have a considerable amount of disposable income that they are using to support either local brands or franchises. But he added, construction costs are quite high and owners are increasing rents to cover increased expenses.

Still, said Gill, numerous retail developments are occurring across the city. He pointed to several hotel projects that Truman has underway, Dream Development’s mixed-use Alpine Park with the Tsuut’ina Nation on the Indigenous group’s reserve just outside the southwestern city limits as some of many examples, along with Chipotle Mexican Grill, Dave’s Chicken and Shake Shack,

He noted that the three latter QSR chains are either developing new outlets or looking for potential development sites.

“So, the demand is there, but they just can’t develop it fast enough,” said Gill.

Barclay Street’s report said overall headlease vacancy edged up to 3% from 2.9% in the previous quarter, while overall availability remained steady at 3.1%, reflecting continued tight market conditions across most of Calgary.

The report highlighted Hermès’ decision to open its first standalone Alberta boutique at 407 8th Ave. S.W. in 2027 as the quarter’s marquee transaction. The downtown flagship will make Calgary one of only four Canadian cities with a standalone Hermès store, joining Toronto, Montreal and Vancouver. Barclay Street executive vice-president Bill Falagaris brokered the lease. Most of Canada’s Hermès locations deploy a store-within-a-store concept in Holt Renfrew outlets.

The report also noted that, as Connect has reported, Foodtastic has secured the Dunkin’ brand for Canadian expansion, adding to strong demand from quick-service restaurant operators.

Power shopping centres and enclosed shopping centres remained effectively full, each posting 0.1% vacancy. Community shopping centres, which account for 29% of Calgary’s retail inventory, recorded a 2.4% vacancy rate, supported by restaurant and daycare demand. Street-front retail vacancy improved by 60 basis points to 6.8%, despite new supply along Stephen Avenue and in the Beltline.

Southeast Calgary led the market with vacancy falling to 1.7%, while northwest Calgary improved to 1.8%. Downtown vacancy rose slightly to 9% as the city core’s vacancy level continued to exceed vacancies in other submarkets. But Gill said numerous office-to-residential conversions and the return-to-office movement are helping to reduce downtown retail vacancy.

Gill attributed the downtown retail sector’s high vacancy to the effects of the COVID-19 pandemic that saw a lot of retailers shut down their operations.

“Not having enough foot traffic and not enough people being in downtown wasn’t that much helpful to a lot of the retailers,” he said. “But now, because of all this pushback on the residential being brought in and providing a more premium living experience, that has brought a lot of people back into downtown to be able to be in buildings that have amenities as well as retail services that match the demand for their tenants in there.

He said companies’ return-to-office mandates have been extremely beneficial to the downtown retail sector.

“You can see a lot more people are back on the Plus 15 [walkway], on the street front, and that has brought actually a lot of other retailers into the market in terms of seeing what the potential could be in downtown,” said Gill. “Obviously, the Uber and DoorDash is still one of the primary drivers for a lot of the QSRs and food uses, but you’re seeing a lot more people investing back into the downtown because they’re seeing how, with the office-to-residential, the back-to-office mandate, how much it has brought back the energy. So, you’re going to see more retail being absorbed in the next little bit here.”

Looking ahead, Barclay Street said Calgary’s retail market is entering the second half of 2026 with “genuine momentum,” citing the Hermès announcement, continued population growth, expanding quick-service restaurant and experiential retail concepts, and healthy preleasing of new mixed-use and community retail developments.

Pictured: Former Hudson’s Bay Company department store in downtown Calgary.

Photo: Shutterstock