While office leasing in the Greater Toronto Area remained strong at the end of 2015 with downtown’s high performance, the suburban market was weaker due to a poor showing in the Toronto West node.
These findings, stemming from Avison Young’s Q4 2015 Greater Toronto Area Office Market Report, also show that gains were found in all asset classes of the Downtown West, South and North nodes, because tenants are relocating to new Class-A developments. Noteworthy transactions range from Scotiabank’s deal to pursue tech and mobile banking innovations in its new Digital Factory launching in 72,000 square feet of former Postmedia space to Autodesk leasing space in phase two of MaRS Discovery District.
According to report lead researcher Bill Argeropoulos, downtown vacancy and availability decreased between quarters ending the Q4 at 8.6 per cent and 5.6 per cent, respectively. Meanwhile, performance was less steller in the Financial Core, with vacancy at 6 per cent at the end of the year and availability at 11.6 per cent.
As it stands, demand has not kept pace with all the new product deliveries in the suburban market. Overall, availability sits at 14.3 per cent, while vacancy is 13.7 per cent. Toronto North ended the Q$ in single digit territory, ahead of Toronto West. Still, investors continue to find value in the suburbs as several assets sold or are now for sale.