Although the ongoing trade tensions haven’t yet affected the London commercial real estate market, many businesses are taking a cautious approach until there is more clarity. Nevertheless, two sectors have defied this trend: a significant lack of industrial space is fueling strong leasing activity, while population growth boosts the city’s multi-family rental market.
According to Statistics Canada’s Annual demographic estimates, census metropolitan areas and census agglomerations: Interactive dashboard, London’s population increased by 3.1 percent to nearly 630,000 from July 1, 2023, to July 1, 2024. This growth has been supported by both international and intraprovincial migration. Most of the ongoing multiple-unit residential construction focuses on student rentals near Western University and Fanshawe College. Additionally, luxury rental units are being developed due to rising demand from young professionals and empty nesters. With higher construction costs pushing rental prices up, one-bedroom units now rent for between $1,800 and $1,900 per month, while two-bedroom apartments range from $2,000 to $3,000. Cap rates for existing multi-unit residential properties are decreasing and currently stand between 4.5 percent and 5.5 percent.
