Recent CBRE Q2 Office and Industrial Statistics Report Reveals Record Highs
According to CBRE’s Canada Q2 Quarterly Statistics Report, Vancouver and Toronto now share the title of North America’s influential office market.
The report highlights the drop of Vancouver’s office vacancy from 4.7 per cent last year, to 2.6 per cent in the second quarter of 2019. Toronto’s downtown office vacancy rate remained at 2.6 per cent during a construction boom in the city’s core.
For the first time ever in Q2, average Class A net asking rents in Toronto’s financial core crossed the $40.00 per sq. ft. (psf) threshold, according to CBRE. These rates were seen mostly in Class AAA new builds as of two years ago.
Vancouver’s average Class-A downtown office rents increased to $44.00 psf in Q2, up from $42.02 psf a quarter earlier.
“Two years ago, it would have been unprecedented to have a Canadian city top the North American office rankings. We now have two Canadian cities setting the pace, which is truly remarkable,” said CBRE Canada Vice Chairman Paul Morassutti. “Something special is happening in this country and the investments being made by businesses and developers suggest that our office and industrial markets are well-positioned for the digital economy.”
Due to increased demand and limited new supply, Ottawa’s office vacancy dropped to 7.0 per cent in Q2, down from 9.9 per cent in the same quarter last year.
Calgary’s downtown office vacancy rate declined to 26.1 per cent in Q2, down from all-time high of 27.8 per cent last year.
The report reveals that Toronto and Vancouver have among the lowest availability rates in North America.
Vancouver’s industrial availability rate fell to 2.1 per cent in Q2 2019, while Toronto’s industrial availability rate has sat at a record-low (1.5 per cent) for the past two quarters.
CBRE’s report says, “Strong demand and low availability pushed average net rents for Vancouver industrial properties to $12.62 psf in Q2, a 1.3 per cent quarter-over-quarter increase.”
Toronto saw average industrial net rents exceed $8.00 psf for the first time in Q2 — the city’s industrial rents had remained between $4.00 and $6.00 psf for two decades, until 2017, according to CBRE.
Industrial product availability in Montréal dropped to 3.2 per cent in Q2.
The Waterloo Region has had five consecutive quarters of positive absorption. This has resulted in an all-time-low industrial availability rate of 1.6 per cent in Q2.
CBRE’s Statistics Report states that average net rents in that market have appreciated to a record-high $6.33 psf.
“Across the country the demand for industrial properties, from tenants and owners alike, has seemingly never been stronger,” said Morassutti. “Third-party logistics, food and beverage and retail companies are snapping up space as the momentum of online retail sales continues to build.”