London's downtown office vacancy rate is still the highest in Canada. Here's what could turn it around

London's downtown office vacancy rate climbed at the end of 2025 remaining the poorest performer in Canada when it comes to attracting employers to the core.

At least 31.5 per cent of rentable office space in downtown London was vacant in the final quarter of the year, up from 30.6 in the third quarter, commercial real estate firm CBRE found.

The downtown is home to roughly three-quarters of the city's office real estate.

CBRE said the increase is driven by the Workplace Safety and Insurance Board's (WSIB) move from the core to the city's east end this past fall.

"WSIB formally left downtown in the fourth quarter, they moved out to Tartan Drive... which was a fairly significant portion of the bump in vacancy," CBRE vice president and broker Greg Harris said.

While London's core office vacancy rate continues to be the highest among the major Canadian cities that CBRE tracks, the firm doesn't expect further significant increases, Harris said.

"There could be some bumps along the road, up and down, but the expectation is we should start to trend in a better direction."

Harris adds that while the vacancy rate has risen, it's been largely because companies have downsized to accommodate remote work. He suggests that could change again with return-to-work mandates being issued by the provincial government and London-based companies such as TD.

"Most [companies] have completed any rightsizing they're looking to do. Plus, with the number of public and private employers pushing a return-to-office position, that could turn into some companies requiring additional office space," Harris said suggesting that will drive the vacancy rate down.

Ward 13 Coun. David Ferreira said the WSIB's move from Fullarton Street was "disappointing, for sure," especially given the province is implementing a full-time back-to-office mandate for government workers.

"It was disappointing to know that the move was done, especially when they had perfectly good accommodations in the core," Ferreira said.

"We did have a conversation with WSIB leadership at the beginning of the term with a request to say, you know, 'stay downtown, it's good here.' But it seemed like the decision was made," he said

Most of London's core office vacancies are in older buildings, or Class B and C buildings, which prospective tenants don't find as attractive and may not be turnkey ready, CBRE says.

London's vacancy rate for Class A buildings, such as One London Place and City Centre, is 19.8 per cent.