It is reassuring to know that downtown Toronto now has the distinction of having the lowest office vacancy rate in North America, dropping to 4.9 per cent in the second quarter of the year from 5.3 per cent in the first quarter, according to a report by commercial real estate firm CBRE.
What’s even more remarkable is that Toronto is outperforming markets like Midtown Manhattan and San Francisco, traditionally the most solid markets in the U.S., said Paul Morassutti, executive managing director on Tuesday.
Despite a building boom that has added about 4.4. million sq. ft. of office space to the core in the last three years, the new and the older spaces are being absorbed.
Longtime downtown companies are moving to the new buildings, opening up space in good, but somewhat older towers in the financial district. That, in turn, is attracting businesses that have been looking for an opportunity to move into the core.
This phenomenon has to do with the fact that many knowledge workers and millennials are showing a preference to living in Toronto. This has in turn prompted businesses to set up operations close to where their potential pool of workers live and vice-versa.
While China still accounts for about 65 per cent of Canadian commercial foreign real estate investment, Europe is playing a bigger role.
CBRE also reported that Canada’s “slow-but-steady” economic growth has helped make Toronto’s second quarter 3.7 per cent industrial availability rate third in North America, second in Canada only to Vancouver’s 3.6 per cent.
It’s the first time in eight years that Vancouver has overtaken Toronto’s industrial availability.
Online shopping has had a “significant impact” on the industrial market, said Morassutti.
“All those goods people are buying on their tablet at home originate from an industrial building as opposed to from a store,” he said.
Meanwhile Canada Mortgage and Housing Corp. (CMHC) released a study showing that a careful approach by builders has prevented a glut of new condos in Canadian cities.
Overall Toronto is enjoying a period of robust growth which is expected to continue for years to come. – CINEWS