As of the end of June, more than 21 million square feet of office space is being built throughout Canada, according to Avison Young’s Mid-Year 2019 Global Office Market Report.
This volume was fully 40% larger year-over-year, and came amid the positive absorption of 9 million square feet (msf) in the 12 months ending June 30, 2019.
The rate far outpaced the nearly 6 msf absorption during the prior 12-month period (ending June 2018), and contributed to overall office vacancy settling at 10.3%.
Toronto, Montreal, and Vancouver posted the strongest performances. Over the last few years, all three cities have seen the steady entry of tech sector giants.
“The labour market remains the major catalyst for Canada’s economic expansion and thriving commercial real estate sector,” Avison Young principal and president (Canada) Mark Fieder explained.
“Urban intensification boosted by immigration, a growing knowledge-based economy and the rising co-working industry have powered Canada’s office market,” he added. “The growing technology sector is taking a bigger slice of the leasing pie – especially in Vancouver, Toronto, Montreal and Ottawa – and, in many cases, driving innovation within traditional businesses.”
In particular, the co-working set-up is forcing landlords and tenants alike to adapt. This is proving to be another major driver long-term demand for usable work space in Canada’s downtown markets.
“Against a global backdrop of diminishing business confidence and a weaker outlook for economic growth, a robust labour market in the world’s largest economies continues to underpin demand for office space with high employment levels prevalent across a number of major markets,” Avison Young noted.
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