Toronto’s office vacancy rate fell to a new low, as businesses relocated to the downtown core and tech companies sought space in the city.
The office vacancy rate hit 2.7 per cent in the fourth quarter of last year, down from 3.1 per cent in the previous quarter and 3.7 per cent in the previous year, according to data from commercial realtor CBRE. Toronto has had the lowest office vacancy rate in North America since the spring of 2016.
“The wave of demand from the tech side is unprecedented, “said Jon Ramscar, an executive vice-president with CBRE.
Part of the attraction is access to a large pool of skilled workers in Toronto.
The lack of space combined with strong demand has underpinned office developments in the city’s core. Ten office buildings are currently under construction, including two skyscrapers that will each add one million square feet.
Tech companies are responsible for pre-leasing a significant amount of space in the new buildings. Their preleases – a contract that requires a deposit to lease the future space – account for a fifth of the 9.1 million square feet in those office developments, according to CBRE.
Shopify has committed to taking space in a giant office, retail and residential complex called The Well, which is slightly west of the financial district and expected to open around 2021. Microsoft is taking a chunk of space in a skyscraper called CIBC Square, which is due to open in 2020. Startup incubator MaRS Discovery District is expanding into a new building on Toronto’s waterfront. That building is scheduled to open in 2021.
Source: The Globe and Mail
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