The Toronto Real Estate Board (TREB) Commercial Network Members reported that leases on industrial, commercial/retail and office space was down in the fourth quarter of 2013.

The quarter only saw 5,410,697 square feet of space being leased, down 8.4 per cent in comparison to the same period in 2012.

Industrial space accounted for about 77 per cent of the leased space, while office and commercial/retail made up 13 and 10 per cent respectively. Lease rates were up for properties transacted on a per-square-foot net basis across all three segments.

According to Cynthia Lai, commercial committee chair of the TREB, slowed manufacturing output that has failed to surpass pre-recession levels may account for the lack of growth in the industrial leasing market.

“In contrast, retail trade has generally been trending upward, which has been a positive for the demand for commercial/retail space. Given that the demand for office space is driven by all sectors of the economy, it makes sense that we saw the amount of leased office space increase,” Lai says.

Industrial, commercial/retail and office property sales in the fourth quarter of 2013 reached a combined 260, down from 265 in the fourth quarter of 2012. The industrial market segment caused the drop in the number of sales.

“While leasing and sales activity in the fourth quarter was down in comparison to last year, pricing was up for major market segments,” Lai says. “This suggests that demand for industrial, commercial/retail and office space has remained strong enough relative to supply to exert upward pressure on pricing.”