Ottawa Retail Market Report

Demand shifts amid uncertainties. Retail fundamentals began to soften in the second half of 2024, driven by weakening space demand in suburban areas. This trend was most pronounced in the Kanata and East Central submarkets, where trailing 12-month net absorption fell to a multi-year low in the first quarter of 2025. In contrast, downtown saw a rebound, reversing the negative trend seen in the past 10 quarters. This shift likely reflects the rise in foot traffic downtown, driven by slowing population growth in suburban areas alongside continued progress on return-to-office efforts – especially in the public sector – which are likely to persist through 2025. Beyond these preexisting conditions, uncertainties surrounding U.S. tariffs are expected to curb retailers’ appetite for expansion, adding further downwards pressure on space demand. That said, the metro’s economic advantages – a large public sector, limited manufacturing exposure and a growing tech scene – should help it navigate near-term challenges.