Canada’s office vacancy rates have increased to an average of 9.2 per cent, up from eight per cent at 2013’s halfway point, according to Avison Young. The commercial real estate services firm’s 2014 mid-year report covers office markets in 12 metropolitan regions across the country, including Calgary, Edmonton, Guelph, Lethbridge, Mississauga, Montreal, Ottawa, Quebec City, Regina, Toronto, Vancouver and Winnipeg.
The report indicates that the Canadian office market is trending towards the recessionary peak of 9.9 per cent reached in 2010. However, analysts remain positive.
“Some Canadian markets have had the wind taken out of their sails lately, but an uptick in cross-border activity could help rectify the imbalance between supply and demand that some markets are witnessing, as considerable levels of new supply are scheduled for delivery over the next several years,” says Mark E. Rose, chair and CEO of Avison Young.
Report highlights include:
- Vacancy rates climbed in 10 of the 12 Canadian markets surveyed;
- Seven of 12 markets posted single-digit vacancy rates;
- Five of 12 markets recorded rates below the national average; and
- Quebec City has the country’s lowest vacancy rate, at 5.8 per cent, while Lethbridge has the country’s highest, at 18.5 per cent.
The report also indicated that more than 83 million square feet of office space was under construction across Canada and the U.S. as of the 2014 mid-year mark, which Bill Argeropoulos, vice-president and director of research (Canada), Avison Young, says is a positive sign of things to come.
“The outcome for stakeholders — both landlords and tenants — is good news,” says Argeropoulos. “Landlords with vacancy as a result of losing tenants to new developments have an opportunity to bring their portfolio to a more competitive level, while tenants will enjoy a marketplace offering numerous options for both more traditional and modern premises at various price points.”
