London’s central business district in 2025 saw an increase in office vacancies, maintaining its status as the least attractive location for employers in Canada. The downtown area of London had a vacancy rate of 31.5% in the last quarter of the year, up from 30.6% in the previous quarter, as reported by the commercial real estate firm, CBRE. Approximately 75% of the city’s office real estate is situated in the downtown core.
The rise in vacancies was primarily influenced by the Workplace Safety and Insurance Board (WSIB) relocating from the downtown area to the city’s east end. CBRE’s Vice President and Broker Greg Harris highlighted the significance of WSIB’s move to Tartan Drive in contributing to the spike in vacancy rates.
Although London continues to have the highest office vacancy rate among major Canadian cities tracked by CBRE, Harris expressed optimism that there would not be substantial further increases. He mentioned the potential for fluctuations but anticipated a positive trend moving forward.
Harris noted that the increase in vacancy rates was mainly due to companies downsizing to accommodate remote work. However, with provincial government and local companies like TD mandating a return to office work, there could be a shift towards increased office space requirements, subsequently driving down the vacancy rate.
The move of WSIB from Fullarton Street was deemed disappointing by Ward 13 Coun. David Ferreira, especially with the government implementing full-time back-to-office mandates for its employees. Despite efforts to persuade WSIB to remain in the downtown area, the decision to relocate was already made.
Most of the vacant office spaces in London are in older Class B and C buildings, which are less appealing to potential tenants and may require renovation. The vacancy rate for Class A buildings, such as One London Place and City Centre, stands at 19.8%.
The city has seen some success in addressing office vacancies through initiatives like office-to-residential conversions, with the first completed conversion at 376 Richmond St. The city offers grants and incentives to property owners to upgrade existing spaces, attracting new tenants and revitalizing the core.
Harris emphasized the positive impact of the office-to-residential conversion program in reducing vacancy rates and improving the market outlook. Ferreira highlighted the importance of reducing office vacancies in the upcoming Downtown Master Plan, aiming to bring back tenants and revitalize the downtown area.
Overall, London’s office vacancy rate is 26.2%, with 10.8% of office space in the suburbs remaining unoccupied, according to CBRE data.