SW Ontario Industrial Market Report

Fundamentals resilient despite trade volatility. Southwestern Ontario’s concentration of auto and steel manufacturing leaves the region exposed to U.S. tariff policy, which introduced a layer of uncertainty last year. This weighed on tenant sentiment and delayed leasing decisions, with vacancy rising nearly 60 basis points to 4.6 per cent by midyear as supply chain visibility weakened and some tenants paused expansion plans. Conditions began to improve in the latter part of the year, however, as trade tensions eased modestly and businesses regained confidence in near-term planning. Leasing activity picked up in the fourth quarter and carried into early 2026, supported by more stable trade expectations and improving economic clarity. Vacancy ultimately edged down 20 basis points on an annual basis, outperforming initial expectations, despite elevated trade-related risks.