Toronto Retail Market Report

Near-term headwinds drive market rebalancing. Toronto’s retail market is normalizing after several years of exceptionally tight conditions. Vacancy increased to 2.4 per cent last year from a three-year low of 1.4 per cent in 2024, while net absorption turned negative for the first time in more than a decade, largely reflecting Hudson’s Bay large-format anchor space closures. Softer population growth, modest employment gains, and affordability pressures are also tempering demand. Despite these headwinds, conditions remain relatively tight, while limited construction should contain further vacancy pressure.