Toronto Retail Market Report

Select retail formats outperform. Toronto’s population growth continued to hit new highs, expanding 4.1 per cent year-over-year as of January. This increasing consumer base and scant new retail builds caused vacancy rates to largely fall across most retail formats last year. While overall vacancy may inch up slightly amid a slowing economy in 2024, select retail property types are likely to outperform. With rising interest rates eating into household incomes, coupled with Toronto’s higher cost of living, consumers are redirecting spending toward necessity-based products. As a result, neighbourhood retail — which tends to house essential tenants like grocery stores — will play an important role in servicing communities seeing strong population growth. New downtown developments like The Well — as well as luxury retail in Yorkville and Yorkdale — are also showing healthy performance. These major retail corridors are more successful in attaining higher rents as they are situated in busy locations and tend to capture a wider range of shoppers.