Quebec City’s Galeries de la Capitale: From Mall to Mini-City with 5,000 New Homes
A shuttered department store is often a symbol of retail decline. But in Quebec City, the closure of La Baie at Galeries de la Capitale isn’t signaling an end – it’s unlocking a potential housing boom. Plans are underway to transform a significant portion of the sprawling shopping center property into a vibrant residential community boasting up to 5,000 new housing units, a move that could redefine urban development in the region.
The Immostar Plan: A New Vision for Galeries de la Capitale
Quebec-based developer Immostar, led by André Pelchat, is currently in advanced discussions to acquire approximately one million square feet of land from Primaris, the current owner of Galeries de la Capitale. The proposed deal, estimated at between $20 and $30 million, would pave the way for a multi-phased construction project, with the first phase slated to begin as early as the first half of 2027, pending City of Quebec approval by January 2026. Immostar’s portfolio includes prominent Quebec projects like the Promutuel insurance headquarters in Lebourgneuf and the Le Madrid 2.0 rest stop, demonstrating their capacity to handle large-scale developments.
From Retail Hub to Residential Core
The shift is made possible by the removal of restrictions previously imposed by La Baie’s lease, specifically those related to parking requirements. These limitations had hindered previous redevelopment efforts. The new development will largely occupy the space previously held by the department store, with potential demolition of parts of the existing structure. This isn’t simply about adding housing; it’s about creating a more sustainable and integrated urban environment.
A History of Ownership and a Prime Location
Galeries de la Capitale, built in 1981 by Développement Iberville, has a rich history of ownership. Sold to the Canada Pension Plan (CPP) in 2005 for $350 million, it later saw the Ontario Municipal Employees’ Retirement Fund (OMERS) become a co-owner in 2013. Significant investments totaling nearly $200 million were made in 2018 before both CPP and OMERS sold the property to Primaris in September 2024 for $325 million. Despite these ownership changes, the mall remains a key commercial asset in Quebec City, boasting annual sales of $761 per square foot – second only to Place Ste-Foy.
Navigating Quebec City’s Evolving Housing Market
The timing of this project coincides with a dynamic shift in Quebec City’s housing landscape. While housing construction has surged – nearly 7,700 homes built between January and October of this year, a 35% increase year-over-year – the vacancy rate currently stands at 2.4% (as of December 2025, according to the Canada Mortgage and Housing Corporation). This indicates a continued demand for housing, even with increased supply. However, rents have also risen by 6% over the past year, highlighting the need for diverse housing options to address affordability concerns. The average rent for a two-bedroom apartment in the Quebec City metropolitan area is currently $1,277.
The Broader Implications of Densification
This project exemplifies a growing trend towards housing densification in urban centers across Canada. As cities grapple with affordability challenges and strive for more sustainable development, repurposing existing commercial spaces into residential areas is becoming increasingly common. This approach not only increases housing supply but also reduces urban sprawl and promotes walkable, mixed-use communities. The success of this project could serve as a blueprint for similar transformations in other Canadian cities.
The Galeries de la Capitale redevelopment isn’t just about bricks and mortar; it’s about reimagining the future of retail spaces in a rapidly changing world. It’s a testament to the power of adaptation and a bold step towards creating a more vibrant and livable Quebec City. What impact will this project have on the surrounding communities and the overall housing market? Share your thoughts in the comments below!
