Southwestern Ontario Retail Investment Forecast

Vacancy rate to remain on upward trajectory. Southwestern Ontario’s retail market came under pressure in 2025 from both trade disruptions and the exit of Hudson’s Bay. The sharp rise in U.S. tariffs rippled through the region’s auto supply chain, curbing production in cities such as Windsor and London. These disruptions dampened job growth, eroded consumer sentiment and weakened demand for retail space across the metro. The closure of nine local Hudson’s Bay stores added to the strain by removing a major department-store anchor and forcing landlords to backfill larger spaces in a challenging leasing environment. Looking ahead to 2026, ongoing uncertainty surrounding Canada-U.S. trade relations is expected to remain the region’s primary headwind. Meanwhile, Canada’s plan to cut international student admissions by half will slow population growth in college and university towns in the near term, weighing on foot traffic and tenant expansion. With both economic and demographic drivers losing momentum, space demand is likely to remain subdued and vacancy rates could edge higher before stabilizing later in the year.