Canada’s commercial real estate may boom after COVID-19: report – National



CBRE says Canadian commercial real estate is pointing to an economic recovery since the pandemic.

A commercial real estate company says office job growth declined in all major cities in Canada in the second quarter and industrial demand rose.

Downtown office rentals have grown in major cities by the lowest amount since the pandemic began last year, with office tenants preparing to welcome employees in the second half of the year.

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CBRE reports that Canada has four of the narrowest office markets in central North America, with vacancies in Vancouver at 6.6 percent, Toronto at 10 percent, in Ottawa at 10.6 percent and in Montreal at 11.1 percent.

Office vacancy in Halifax dropped to 19.7% in the city center and 13% in the suburbs, a possible sign of a return to normalcy as part of the opening process.

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The subleases that flooded the market during the pandemic are now in demand as some companies are pulling space from the market to reoccupy offices.

The company says nearly 90,000 square feet of previously subleased office space was canceled or leased out in the city center in the second quarter, with half in Toronto.

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“Sub-lease placement may be a reaction to a sudden market correction. It is a very good sign that a new business is subletting or leasing it out, and this is just the beginning of a trend, ”says CBRE Canada Vice Chairman Paul Morassutti.

“Canada’s major office markets have performed well over the past year compared to our global peers, and we can expect momentum to continue to pick up as restrictions ease.”

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High demand for premium quality industrial property, with the Waterloo region having the lowest industrial availability in North America at 0.9 percent.

All off-prairie markets have a 3 percent or less affordability, while Toronto, Vancouver and Montreal have 1.2 percent, 1.1 percent, and 1.4 percent, respectively.

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Rising land and construction costs are limiting industrial business opportunities.

Space for rent or purchase fell 35 percent in the quarter in Vancouver, 28 percent in Montreal and 25 percent in Toronto. Rates in Calgary dropped 1.2 percent and Edmonton dropped 0.7 percent.

“The level of industrial demand is unprecedented and is now facing very real constraints,” added Morassutti.

“We don’t have enough space to meet the needs of the business, and we can’t build a new one fast enough.”

© 2021 Canadian Press


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