Toronto Retail Market Report

Suburban dynamics keep retail resilient. Toronto’s retail sector demonstrated resilience in the first half of 2025, despite heightened uncertainty and higher U.S. tariffs. Space demand softened slightly in the first quarter but rebounded strongly thereafter. With limited new supply coming to market, the vacancy rate remained low, ending June at 1.5 per cent. Strength was particularly evident in suburban submarkets such as Mississauga and GTA North, while downtown conditions showed a modest weakening. The heavy concentration of essential retail outside the core has likely supported this divergence. Looking ahead, these dynamics are expected to persist through the remainder of the year. That said, with office mandates gaining further traction, the longer-term outlook for downtown retail may be turning a corner. On balance, Toronto’s retail fundamentals are projected to stay healthy, as subdued construction activity maintains a competitive leasing environment amid low vacancy rates.