London’s downtown office vacancy rate is now the highest in Canada at 32 per cent, and the city’s overall office vacancy rate is at an all time high of 26.5 per cent. That’s according to the Q1 2025 Canada Office Figures report from commercial real estate investment firm Coldwell Banker Richard Ellis (CBRE). It’s no surprise to Katrina Wice, whose family has been operating Nooner’s lunchtime eatery for nearly four decades. Wice says the business depends on foot traffic from the office crowd that’s just not there anymore. “These buildings that have now left the downtown core - that used to be on a daily: they’d come visit us, come for lunch, have lunches with friends, you know, co-workers, anybody, they’d gather. They don’t. They’re not doing that, so the impact is huge,” Wice explained. According to CBRE the office market has struggled, with eight consecutive quarters of negative net absorption. Downtown London alone has posted a cumulative 448,000 square feet of negative net absorption since the second quarter of 2023. Put simply, it comes down to far more space being given up than occupied. Greg Harris, CBRE Associate VP Advisory and Transaction Services, says the work-culture shift from office to home that happened during the pandemic changed everything. “What’s happening more in the core is right-sizing, down-sizing of existing companies,” said Harris. “Not as many people in on Mondays and Fridays, and those various work from home hybrid setups,” he explained. The city is banking on office to residential conversions to help turn things around in the downtown. “Council’s aware of the office vacancy rate and the direction it’s going,” said Mayor Josh Morgan. “That’s why we brought forward a number of programs to try to address this. First is the office to residential conversion program. Second, we’re launching a new commercial vacancy program to assist businesses who want to set up businesses there, with some of their costs,” he said. The CBRE report also said availability of industrial space in London has increased 80 basis points to 3.6 per cent. Deputy Mayor Shawn Lewis says we’re beginning to see increased trepidation from would-be investors. “And even I’m aware of a business in my own ward the was looking at potentially relocating to London that’s put their plans on hold for the moment because they’re just not sure what the tariffs are going to mean for access to the U.S. markets, what costs of U.S. products coming in for their processes will look like,” said Lewis.
