Toronto office market soars | Property Post | News | Financial Post

Toronto office market soars | Property Post | News | Financial Post

Rents are up and demand for space has hit an all-time high in the greater Toronto area office market, according to a new report from Colliers International.

The real estate firm says the average vacancy rate across the GTA was 6.3% in the third quarter, down from 7.2% a quarter earlier. The downtown vacancy rate dropped from 5.5% to 5.1% over the same period.

The strong demand helped bring the rate on asking rent with the average in the GTA $17.83 per square foot per year, up 13% from a year earlier.

At that level, rates are where they were prior to the recession of 2008. Asking rate for AAA facilities in the downtown core climbed more than 10% from a year ago to an average of $32.03 per square foot, up from $28.79 a year earlier.

“Contrary to the perception that the Toronto office market may be overbuilt, the numbers are telling a different story,” says John Arnoldi, executive managing director in the Toronto region for Colliers.

“With such low vacancy rates that are expected to drop even further, the pipeline of new inventory and projects that are underway is relatively conservative compared to similar North American cities such as Boston and New-York. Additional demand for downtown office space is also going to be fuelled by what we see as the reverse migration trend of businesses relocating back to the core.”

Midtown Toronto also showed strength with the vacancy rate down to 5.5% as rental rates at an average of $16.88 per square foot helped bring business into the area.

“The move of Postmedia network to the area, the entrance of Louis Vuitton and the re-development of the old Four Seasons Hotel and other condominium projects are only some examples,” said the company in a release.

“Colliers expects vacancy rate in the midtown sub-market to continue its decrease, resulting in slight increases in rental rate, especially as it presents a more cost-competitive alternative for companies that wish to set a base in Toronto.”


Brandon Lee Cell 416-471-0353, HL/Bayview


About this entry