Market Report
Toronto Retail Market Report
2025 Investment Forecast
Investors Prefer Residential Intensification
or Redevelopment, Limiting Retail Supply
Fundamentals to hold despite higher cost of living. As Canada’s largest city, Toronto attracts a lion’s share of new residents to the country, as well as fellow Canadians in search of employment. Aided by record immigration in recent years, the metro’s population grew by 10 per cent between 2017 and 2023. This influx of people propped up household spending, with retail sales increasing 42 per cent over that same time period. Meanwhile, Toronto’s retail property inventory only increased by 3.0 per cent, which pushed the metro’s retail vacancy rate to an all time low of 1.3 per cent in 2024. Nevertheless, restrictive borrowing costs caused retail sales to flatline and vacancy to stabilize over the latter half of last year. Looking ahead, while falling interest rates will provide some relief to consumers, the metro’s higher cost of living and curbed population growth amid recent changes to Canada’s immigration policies are likely to keep retail sales muted and potentially push vacancy up. Even so, Toronto’s retail property outlook remains optimistic. Not only will limited supply growth act as a backstop, but recent provincial legislation initiating the privatization of alcohol sales will also provide a new source of space demand in an already competitive market.
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