Hudson’s Bay’s potential closure looms as vacancy rate in downtown Victoria climbs

A massive amount of retail space could soon be available in Victoria, where downtown retail vacancies are already on the rise.

As Hudson’s Bay prepares to liquidate its stores, five floors of downtown real estate could soon be vacant in Victoria.

The potential sell-off comes as retail vacancies climb in the core of B.C.’s capital.

“If you look at where we were at the beginning of 2024 versus 2025 for downtown, we went from 9.2 per cent vacancy to 11 per cent vacancy – and in a one-year period,” said Graham Smith, a broker with Colliers Victoria.

On Monday, an Ontario Supreme Court judge delayed his decision on permitting the liquidation, leaving the future of The Bay in flux.

If it goes ahead, the liquidation would include all 80 Hudson’s Bay stores, two of which are in Victoria. One is located in the Bay Centre downtown and the other is in the Mayfair Shopping Centre, north of the core.

“If you combine downtown with Mayfair, that’s about 375,000 square feet of space,” Smiths said. “It’s a huge block of space for our relatively small market.”

The Downtown Victoria Business Association (DVBA) said losing the stores could be viewed as a loss or an opportunity.

“The Bay Centre has been around for 20-plus years. They’re experts in this and I’m sure they’re already looking at what possible options could be there in the future,” said DVBA executive director Jeff Bray.

The Bay Centre did not respond to a request for comment. Mayfair Shopping Centre said it has no additional details beyond what Hudson’s Bay has shared publicly.

If the department stores shutter, it’s unlikely the malls will be able to lock down similar retailers, Smith said.

“They’ll probably end up having to look at ways to break the units into smaller spaces to accommodate smaller footprint tenants,” he said.

“There’s certainly an opportunity to get retailers that are more in touch with current market conditions … and hopefully create a situation where the consumer has a better opportunity to shop.”