A third (30 per cent) of GTA-based companies are dissatisfied with their current space, while half (50 per cent) of businesses would consider relocating to the suburbs, according to a survey commissioned by Colliers International. Colliers International’s GTA Tenant Sentiment Survey, which consists of 115 office and industrial tenants across various industry sectors, also found that space constraint was quoted as a key factor and main concern among respondents who were looking to relocate their operations. Additionally, 30 per cent of companies find that their needs have changed in such a way that their current space no longer accommodates them. The most common reason (85 per cent) is a lack of space, or poor use of space.
While rental cost plays a key factor (82 per cent) in respondents’ future leasing decisions, access to transportation hubs (76 per cent) and access to public transportation and parking (63 per cent each) were also cited as dominant factors when it comes to leasing corporate space, according to the survey. Additionally, proximity to transportation hubs, low rents and access to city services were the top three reasons for companies’ current location picks. Surprisingly, and on the other side of the spectrum, green building, amenities and corporate neighbours were ranked low on respondents’ real estate decision scale.
“Colliers’ GTA Tenant Sentiment Survey findings should be of interest not only to landlords but also to the mayoral candidates and city officials who are looking to attract and retain businesses in their respective municipalities,” says John Arnoldi, Managing Director with Colliers International in Toronto. “Thriving businesses are the growth engine of every city, therefore understanding and catering to the real estate and infrastructure needs of companies can go a long way in attracting companies and supporting the economic growth of the GTA.”
And when it comes to growth, survey respondents are optimistic about their future prospects. More than half (53 per cent) of companies participating in the survey forecast an economic recovery and three in four (76 per cent) hold a strong positive outlook for their companies over the next five years. Therefore, it should not come as a surprise that two-thirds (67 per cent) of respondents are planning to increase their workforce over the next five years.
Scott Addison, Executive Vice President, Eastern Canada from Colliers International adds “The positive economic outlook expressed by many of the companies we surveyed, coupled with their plans for workforce expansion, may trigger an era of migration and relocation, as companies are looking to optimize their real estate position. This presents an opportunity for landlords and municipalities to leverage the expected growth by meeting the needs of current and potential tenants both in terms of space, infrastructure and services.”
Additional Findings and Highlights:
- Among respondents who think other municipalities offer a better competitive advantage, Vaughan (38 per cent) and Mississauga (33 per cent) were cited as exemplary municipalities.
- Almost two-thirds (60 per cent) of respondents believe they are limited to select locations within their respective cities, mainly (51 per cent) due to the need to be closer to their customer base.
- Companies with younger workforce (average under 30) are more likely to relocate into metro Toronto (73 per cent) while companies with older workforce (30-50 year old) are more likely to relocate to the suburbs (54 per cent).