Toronto Retail Market Shows Resilience Amid Shifting Consumer Demand

Toronto's commercial and retail property market enters the final quarter of 2026 with changing consumer spending patterns, selective leasing demand, and continued interest in well-located retail properties.

While recent retail sales figures reflect short-term weakness, demand for grocery-anchored centres, essential services, and established commercial corridors continues to support leasing activity across the broader market.

Increasing downtown office attendance is also contributing to renewed foot traffic and opportunities for food, beverage, and service-oriented businesses.

For property owners and investors, tenant quality, accessibility, and competitive leasing strategies remain important considerations as Toronto's commercial market approaches 2027.

Key Market Indicators

• $12.47 Billion | Toronto CMA retail sales

• +2.4% | Toronto annual retail sales growth

• −4.7% | Toronto monthly retail sales change

• 28 of 131 | Canadian retail rent benchmarks recording increases

Figure 1 | Retail Sales Growth by Market

Retail sales continued to record positive annual growth across Canada, Ontario, and the Toronto metropolitan area. Toronto experienced a 2.4% year-over-year increase, compared with 4.9% provincially and 5.1% nationally.

However, Toronto's monthly sales declined by 4.7%, highlighting the uneven nature of consumer spending. This reinforces the importance of selecting resilient tenants, understanding neighbourhood demand, and maintaining competitive commercial properties.

For investors, annual growth remains encouraging, but shorter-term fluctuations emphasize the value of careful market analysis and long-term leasing strategies.

Figure 2 | Toronto Retail Asking Rents by Format

Toronto's commercial retail market continues to demonstrate significant rental differences across property formats. Indicative net asking rents range from $20–$25 per square foot for neighbourhood retail properties to $45–$75 per square foot for urban mixed-use spaces, reflecting the importance of location, accessibility, and surrounding consumer activity.

Power centres, convenience plazas, and community retail properties occupy different positions within the rental market, offering opportunities for a range of businesses and investors. Strong tenant demand in desirable commercial corridors continues to support rental growth, particularly where suitable space remains limited.

For commercial property owners, maintaining an appropriate tenant mix, evaluating rental positioning, and adapting to evolving retail demand remain essential to supporting occupancy and long-term asset performance.

Market Outlook | What Owners and Investors Should Watch

Toronto's commercial leasing market continues to favour strategically located retail properties, particularly those serving everyday consumer needs. Grocery, healthcare, fitness, personal services, and quick-service restaurants remain important sources of tenant demand.

Limited new retail supply and increasing interest in established commercial corridors may continue to support well-positioned properties. However, cautious discretionary spending and varying conditions between neighbourhoods reinforce the importance of realistic leasing strategies and ongoing property evaluation.

Heading into 2027, owners and investors should prioritize tenant retention, property presentation, operating efficiency, and opportunities to strengthen the long-term competitiveness of their commercial assets.

From Our Brokerage Team

At Stoneleigh Management Inc., we recognize that changing market conditions create both challenges and opportunities for commercial property owners and investors.

Whether leasing vacant space, evaluating an investment property, repositioning an existing asset, or exploring a potential sale, understanding local market conditions is essential to making informed real estate decisions.

Our brokerage team works with property owners, investors, and businesses throughout Toronto, the GTA, and Durham Region, providing commercial leasing, sales, and advisory services supported by comprehensive property management expertise.

Buy • Sell • Lease • Manage

Stoneleigh Management Inc. www.stoneleighmgmt.ca

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