Would-be investors in Canadian commercial real estate should begin considering markets beyond the usual hotspots of Toronto, Montreal, and Vancouver, if recent trends south of the border are any indication.
The tech industry’s sustained hunger for Canadian offices is gradually depleting available urban office space. The examples set by some U.S. cities might provide a good answer to this quandary, according to the Computing Technology Industry Association (CompTIA).
“Something like a Charlotte, or a Kansas City, or an Austin,” CompTIA senior vice-president of research and market intelligence Tim Herbert told Postmedia in an interview.
“These cities [are] more affordable, [and] in some cases you can make an argument that there is better quality of life.”
In its Cyberprovinces 2019 study, CompTIA noted that smaller cities can become more feasible investment options in the very near future. Last year alone, Canadian tech employment expanded by 61,000 new jobs, amounting to a 3.8% annual increase.
Overall, the tech workforce grew by as much as 249,000 new employees since 2010.
Herbert added that demand for Canada’s office spaces is “not just limited to technology companies, who are starting to take office space or build new headquarters, but a range of different company types are attracting tech talent.”
Data from Avison Young showed that the Canadian office market has seen the positive absorption of 9 million square feet (msf) in the year ending June 30, 2019. This has massively outstripped the nearly 6 msf absorption during the immediately preceding 12-month period.
The sustained popularity of the industry, and the resulting demand upon Canada’s commercial real estate, is impelled by the strength of its long-term employment prospects. In 2018, tech earnings clocked in an average of $78,070 – fully 51% higher than the average reading of $51,794 in the private sector.
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