More office space was absorbed in the second quarter of 2014 than in any period in the previous two years, CBRE reports. While the national vacancy rate hit 10.4 per cent, market insiders confirm it is now rising at a slower rate.

“Landlords remain confident about the long-term prospects for the Canadian office market, but much like the state of football in England, reasons for optimism may not be immediately apparent,” says John O’Bryan, chairman of CBRE.

A slight increase in the national vacancy rate tends to conceal the 1.6 million square feet of existing space leased in the second quarter. That’s because  2 million square feet of new space came onto the market during the same period.

Calgary, where the vacancy rate fell 30 basis points (bps) to 10.6 per cent from the previous quarter, was the most active Canadian market. This included the opening of a new 841,000 square-foot office building at 8th Avenue Place West, which was fully leased upon its completion.

Similarly, the office space leased in Toronto, Montreal and Vancouver outweighed the space returned to the market. Unlike Toronto, where downtown held most of the activity, the suburbs accounted for the majority of space leased in Montreal and Vancouver.

“The uptick in demand for existing office space may be indicative of some broader strength in the office market, but more than likely, there were a number of businesses that could simply no longer delay committing to office leases,” says Ross Moore, CBRE’s director of research.