Office towers are photographed in Toronto's financial district on June 27, 2018. The Canadian Press/Tijana Martin
Strong demand in Canada’s office market is shifting the advantage in lease negotiations toward landlords’ favour, as a new report says net leasing activity remained positive for a fifth consecutive quarter.
CBRE says net absorption of office space across the country totalled two million square feet in the third quarter of this year, with nine of 11 regional markets recording positive net leasing activity.
CBRE Canada research managing director Marc Meehan says the office recovery trend of recent years is now “well-entrenched,” and it’s now a landlord’s market amid limited “trophy” building space.
He says office demand “has come back so strongly that we’re now looking at a challenging future for businesses as many won’t be able to access quality office space in sought-after locations.”
Eight Canadian markets reported declining downtown vacancy in the quarter, led by Toronto, Calgary, Ottawa and Halifax.
The report says there were no notable office project completions during the three-month period, as new supply is expected to remain “constrained” amid a lack of significant deliveries forecasted beyond 2027.
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