Fourth quarter statistics from Cushman & Wakefield (C&W) reveal a strong Toronto office market. According to the commercial real estate brokerage, 1.6-million square feet of office space was added to the city’s inventory this year and, despite that, vacancy rates remain the same as they were in Q4 2013. C&W reported a mere 0.1 per cent increase from Q3 2014 in Toronto’s office vacancy rate.
“The demand for downtown office space in Toronto in the last five years has been phenomenal,” says Michael Caplice, Senior Managing Director and Market Leader for Cushman & Wakefield – Greater Toronto Area. “Year after year, we’ve seen unprecedented office and condo development, and a steady flow of people and businesses moving into our downtown.”
Caplice attributes the success of Toronto’s office market to the following factors:
- Changes in technology and workplace models;
- New towers attracting tenants; and
- Changing demographics, including a “Millennial workforce” seeking office locations close to amenities, public transit and mixed use neighbourhoods.
Looking forward, C&W expects downtown demand growth to remain strong in 2015, but vacancy rates are projected to increase slightly as a result of relocations.
“We expect demand especially for the new towers to remain robust for the foreseeable future,” says Caplice. “In many ways, the performance of our downtown shows that Toronto has truly become a world-class city with a diversified economy that gives it more resilience and a vibrant life of its own.”