The property advisory giant reports that vacancy rates at suburban offices across the country fell during the third quarter of this year from 10.4 per cent to 9.9 per cent, with Grace A offices proving particularly sought after.
Calgary, Vancouver and Ottawa emerged as the Canadian cities where central area office space markets are picking up most sharply. Overall vacancy levels at office space nationwide dropped year-on-year from 8.9 per cent to 7.5 per cent.
The firm behind the data said that tenants in suburban offices in cities like Toronto, Edmonton and Montreal, among other Canadian locations, are expanding partly in an effort to take advantage of currently favourable market conditions.
However, C&W did note that there is a “levelling out” in some of the country’s largest central business districts and in certain cases “the most desirable space has been leased and little new inventory is coming on stream”.
C&W researchers also said that office space markets in central city areas tended to pick up more rapidly after the worst of the recent global financial crisis was over. The recovery for suburban office markets was always likely to be more of a slow and steady process, according to the Q3 report on office trends in Canada.
Reflecting specifically on the office space market in Toronto, C&W’s local senior managing director for office leasing Paul Morse said: “The overall strength and vitality of the downtown core remains solid and we expect this trend to continue as financial institutions’ demand for office space moves toward a more normal market.
“The positive absorption activity in the suburbs is largely being driven by a cross-section of industries such as engineering, technology, information systems and software companies taking advantage of market opportunities.”
Editor’s notes: In the first quarter of 2023, the vacancy rate in Edmonton stood at 24 per cent.
Other cities across Canada had similarly high vacancy rates although Toronto’s rate was 10.4 per cent and the office space vacancy rate for Metro Vancouver stood at 7.8 per cent.
The average vacancy rate across all Canadian cities in Q1 2023 was 17.3 per cent.