Market Trends of Canada Office Real Estate Industry
This section covers the major market trends shaping the Canada Office Real Estate Market according to our research experts:
Office spaces in Toronto and Vancouver are increasing
Office occupancy rates in downtown Toronto and Vancouver are rising swiftly. The third quarter of 2022 saw Canadian office markets continue to grow, with CBRE's new Q3 Figures report providing signs of growth in downtown areas despite resurgent demand for premium office space.
According to industry experts, Canadian office markets have proven extraordinarily resilient despite years of pandemic-related obstacles, new supply additions, persistent remote work issues, as well as a pending economic recession.
These most recent statistics provide solid proof that cities' vitality and momentum are returning, supporting increased leasing activity. Despite the fact that the economy is the center of attention, it is proving to be harder to anticipate than normal.
Indian IT service business Mphasis chose Calgary's First Tower as the location for its brand-new 26,160 square-foot Canadian headquarters. Microsoft secured a deal for about 400,000 square feet at the B6 building in Vancouver (1090 W Pender Street).
In the meantime, Toronto saw medical technology vendor PointClickCare increase its presence by acquiring 90,000 square feet over three floors at The Well, one of the most well-known new complexes in the city.
In Q3, downtown vacancy decreased in seven of of Canada's ten major office cities, while suburban vacancy decreased in five of those markets. In the midst of a flurry of leasing transactions, Calgary, Waterloo Region, and Vancouver all saw their downtown and suburban office vacancy rates decline, making them the actual MVPs of the quarter.
Positive Pre-Leasing Indicates Hope for the Future of Office Space
As they prepare for the return of employees to offices at full vigor following a substantial decline in Covid-19 cases across the nation, corporations are reviving growth plans and reserving vast office spaces around the nation.
Several big technologies, consulting, and financial services companies, including Google, Deloitte, Amazon, Qualcomm, and Wells Fargo, have already committed to leasing huge amounts of office space in the first quarter of the current calendar year.
The third quarter saw a steady increase in pre-leasing activity overall, signaling strong demand for contemporary office spaces. The 12.7 million square foot national development pipeline is 54.0% pre-leased.
In Vancouver, 83.8% of the space that is currently being built in the business district has been pre-leased. A sizeable chunk of the 1.9 million square feet of newly constructed space in Toronto has already been pre-leased, while big deliveries like Armour Group's Westway IV in Halifax have reached pre-leasing rates of 90.3%.
