Ottawa Retail Investment Forecast

Muted leasing amid mounting challenges. Ottawa’s retail outlook for 2026 warrants caution following softening fundamentals last year. Trade disruptions and weaker consumer sentiment weighed on space demand in 2025, resulting in a 60-basis-point rise in vacancy. Entering this year, lower interest rates will continue to support consumer spending, but underlying headwinds are likely to persist. Population growth is projected to stay subdued as federal policies continue to restrict the intake of international students and foreign workers, limiting the expansion of the metro’s consumer base. More notably, the federal government’s ongoing efforts to rein in operational spending could lead to significant job reductions across departments, posing risks to Ottawa’s retail fundamentals given the metro’s dependence on public-sector employment. These factors are expected to mute leasing activity through the year. On the supply side, construction is forecast to remain restrained, with developers hesitant to launch new projects amid elevated costs and uncertain demand. This limited pipeline should help prevent a significant rise in vacancy and maintain overall market stability despite modest space absorption.