Key Takeaways:
- London’s downtown office vacancy rate increased to 31.5% in the final quarter of 2025, the highest among major Canadian cities.
- The increase is attributed to the Workplace Safety and Insurance Board’s (WSIB) move from the core to the city’s east end.
- The city’s office-to-residential conversion program has helped reduce office vacancies and is expected to continue to do so.
- The upcoming Downtown Master Plan will focus on reducing office vacancies and bringing more tenants back to the core.
- The city is considering strategies such as reserve funds for potential acquisition of strategic properties to support the revitalization of the downtown area.
Introduction to London’s Office Vacancy Rate
The city of London, Ontario, is facing a significant challenge in its downtown area, with a staggering 31.5% office vacancy rate in the final quarter of 2025. This rate is the highest among major Canadian cities, and it has been a persistent issue for the city. The latest data from commercial real estate firm CBRE shows that the downtown area has roughly three-quarters of the city’s office real estate, making it a critical component of the city’s economy. The increase in vacancy rates is largely attributed to the Workplace Safety and Insurance Board’s (WSIB) move from the core to the city’s east end, which has left a significant amount of office space empty.
The Impact of WSIB’s Move
The WSIB’s decision to relocate its head office from downtown Toronto to a former 3M building in east London has had a significant impact on the city’s office vacancy rate. The move, which included workers from the agency’s downtown London offices, has resulted in a substantial increase in vacant office space. Ward 13 Coun. David Ferreira expressed disappointment at the move, particularly given the province’s implementation of a full-time back-to-office mandate for government workers. Ferreira noted that the city had conversations with WSIB leadership to encourage them to stay downtown, but the decision had already been made.
Class A Buildings and Office Vacancies
Despite the challenges facing the downtown area, there are some positive trends emerging. The office complex at 383-391 Richmond St., previously occupied by the Royal Bank of Canada, has been empty since the bank moved out in late 2019. However, most of London’s core office vacancies are in older buildings, or Class B and C buildings, which prospective tenants find less attractive. In contrast, the vacancy rate for Class A buildings, such as One London Place and City Centre, is 19.8%. This suggests that there is still demand for high-quality office space in the downtown area, and that the city’s efforts to revitalize the area may be bearing fruit.
Revitalization Efforts and the Downtown Master Plan
The city has implemented various initiatives to address the office vacancy issue, including an office-to-residential conversion program. This program has helped reduce office vacancies and is expected to continue to do so. The program provides grants to property owners to upgrade existing buildings and spaces, making them more attractive to new tenants. The city is also exploring other strategies, such as reserve funds for potential acquisition of strategic properties, to support the revitalization of the downtown area. The upcoming Downtown Master Plan, set to be tabled by late June, will focus on reducing office vacancies and bringing more tenants back to the core. Coun. Ferreira noted that the city will play a key role in this effort, including potentially relocating its own offices to the downtown area.
Conclusion and Future Outlook
While the current office vacancy rate in London’s downtown area is a concern, there are signs of progress and potential for growth. The city’s office-to-residential conversion program and other initiatives are helping to reduce vacancies, and the upcoming Downtown Master Plan will provide a comprehensive strategy for revitalizing the area. As companies begin to return to the office, driven in part by provincial government and company mandates, the demand for office space is expected to increase. With the right strategies and investments in place, London’s downtown area can thrive once again, and the city can reduce its office vacancy rate to more sustainable levels.
