Northern Delaware retail vacancy rate drops to 7.7%


According to a report from Colliers, a commercial real estate firm, New Castle County’s retail vacancy rate dropped a full percentage point to 7.7% in the second quarter.

This is the first time vacancy has been under 8% since mid-2019, with the Covid-19 pandemic in 2020 forcing some retailers and enclosed malls to close for a time. The increase in occupancy puts the county slightly below the Delaware Valley vacancy rate of 7.9%

The report from the Philadelphia office of Colliers noted that two specialty grocers, Huong Vuong and Parivaar Supermarket, took over two long-vacant locations in Newark and New Castle. 

Despite the looming exits of retailers like Bed, Bath and Beyond and Christmas Tree Shops, more than 440,000 square feet of new retail development is in the planning stages in New Castle County. Overall, the pace of retail chain exits has slowed, Colliers indicated, although a few former Sears and Kmart locations remain vacant.

Parcel developments with freestanding properties are in the works in Pike Creek and the Brandywine Town Center. The Town Center was designed decades ago as an enclosed mall with exterior tenants like Target taking space. The inside area, at times served as office space. Work is underway on adapting the spawling former horse racing track to current shopping and dining patterns.


According to Colliers, one hotspot is the Middletown area, including the planned Northside Shopping Center that seems to be slated to become the site of a Target store. Outside the town, Weis, a supermarket chain, announced plans to anchor the Bayberry Town Center, a part of a large planned development.

The Grove, the former College Square shopping center in Newark, is seeing growth in new restaurants and retail space. The center includes a large apartment complex not aimed at undergraduate students at the adjacent University of Delaware. UD continues to face a shortage of student apartments.

A high occupancy rate at Christiana Mall and adjacent retail areas bolsters the northern Delaware retail market. Delaware benefits from the lack of a retail sales tax, although retailers pay a gross receipts tax on overall sales.

In the region, Colliers reported the shopping center vacancy dropped to the lowest level since the end of 2019. There was a reprieve in big box store closings and the backfilling of multiple large vacancies.

Activity from tenants looking for inline locations increased, and demand for pad sites has remained strong as new restaurant concepts, convenience store-gas stations, and car wash chains, the company reported.

As more workers have returned to the office, at least part-time, there has been an uptick in demand for daycare centers and other early education options. Pet “wellness” is another active sector. Experiential and health-wellness sectors have been expanding, and indoor golf and pickleball are two of the most active operators seeking new locations.

Discount grocers such as Aldi and Grocery Outlet and specialty supermarkets have been expanding, but Amazon Fresh delayed opening stores leased over the last two years, Colliers reported.

In New Castle County, Wegmans opened a store last year at Barley Mill, a redeveloped mixed-use site at a former DuPont office center.

Also, on the grocery side, Aldi’s rival Lidl has pulled back and has not opened a completed store in Bear for reasons that have not been fully disclosed. It also moved off a proposed store near Newark. Recently, Lidl has closed several underperforming stores in its East Coast footprint. It operates one New Castle County store in Middletown.