Market Report
Ottawa Office Market Report
2025 Investment Forecast
Diminishing Demand From Public
Sector Plays Critical Role in Office Sector Outlook
Vacancy rate continues to rise in the near term. Although Ottawa maintains one of the lowest office vacancy rates in Canada, the sector faces a unique challenge: the federal government’s plan to divest its office buildings over the next decade. While some underutilized properties are slated for conversion into residential use, lengthy consultation and development processes mean that the vacancy rate will likely keep rising in the near term, especially in older and lower-quality buildings located in the downtown area. Some submarkets outside the city centre have demonstrated resilience, however, with the return-to-office trend and falling interest rates supporting leasing activity. In Kanata, where tech firms are concentrated, trailing 12-month net absorption turned positive in the third quarter of 2024 after staying negative since late 2022. Business expansion is expected to gain further momentum in 2025 – particularly in the tech sector – as interest rates decline to more stimulative levels. These changes, paired with a disciplined construction pipeline, should help stabilize the vacancy rate over the course of this year despite the federal government offloading space.
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