Toronto panorama

GTA’s office market improves in Q2

Monday, July 28, 2014

The Greater Toronto Area’s (GTA) office market has shown signs of improvement following a poor first quarter. The overall vacancy rate of 9.4 per cent has not changed over the last three months.

Downtown, Midtown and Toronto West exhibited strong office market activity. In contrast, more space returned to the market during the second quarter for Toronto East and North.

“Toronto’s Downtown market saw a noticeable uptick in leasing activity, centred on class A and B buildings along the University Avenue, Bay Street and Front Street West corridors, spanning the Financial Core, Downtown North and West nodes,” reads Avison Young’s second quarter report. “Well-priced large blocks of space either currently vacant or soon to be vacated by some of the tenants relocating to new developments are highly sought after.”

Toronto West’s availability rate has declined 10 basis points (bps) to 16.1 per cent. Its vacancy rate, which currently sits at 13.7 per cent, has decreased as well. Meanwhile, Toronto East and North experienced stark rises in availability and vacancy as prominent companies left those areas. Notably, Imperial Oil returned 200,000 square feet to the market.

“In Toronto North, sublease space has doubled over the past year, largely concentrated in a handful of class A buildings in North Yonge and Vaughan,” reads the report. “Collectively, the suburban market ended the first half of 2014 with higher availability (14.5 per cent) and vacancy (12.7 per cent) rates.”