CBRE data shows that the vacancy rate for offices in the city slipped below 5 per cent in the second quarter of 2016. Meanwhile, industrial real estate vacancies were the third lowest in North America.
“Toronto continues to demonstrate remarkable strength and is becoming a stand-out market not only in Canada, but globally. Downtown vacancy rates have been on a downward trend since 2013 despite almost 4 million sq. ft. of new supply delivered in the same time frame,” said CBRE’s executive managing director Paul Morassutti.
He said that strong client demand has seen older inventory taken up by new tenants as existing businesses move into Class A new-builds. He dismisses the view that the Toronto commercial market is over-supplied.
“Many commentators were quick to label Toronto’s office market as over-supplied and point to the 2.9 million sq. ft. of new builds currently under construction as evidence. However, this represents only 3.4 per cent of the total downtown inventory, which is extremely modest, particularly when compared to other leading North American markets.
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The office market in Toronto has emerged as one of the best performing in North America with the lowest downtown vacancy rate of any major market.