Toronto Retail Market Report

Positive outlook despite near-term softness. Toronto’s retail market begins 2026 with cautious underlying momentum as GDP, employment, consumer spending, and disposable income are all forecast to cool this year, while population levels remain flat under tighter immigration targets. These pressures are expected to be short-lived, however, with all indicators improving beyond 2026, keeping market conditions tight. Vacancy has edged up but still reflects a supply-constrained environment, while necessity-based, fitness, food-service, and value retailers continue to support long-term leasing. The main drag stems from Hudson’s Bay closures, which pushed net absorption negative and released large-format blocks back to market last year. That said, well-located big boxes are attracting interest, while older spaces offer repositioning opportunities, helping to keep the broader retail landscape stable despite near-term economic uncertainties.