CBRE has released their second quarter figures for the Toronto commercial real estate market, with the numbers revealing increased vacancy rates in Class A office space, as major tenants relocate to new office towers coming online in the city centre.

The second quarter of 2015 was marked by a continued upward trend in vacancies, as a negative spike in net absorbtion of Class A office contributed to a city-wide 10-year high vacancy rate of 9.7%. In Downtown Toronto, rising vacancies in Class A space were largely offset by strength in the Class B and C office space markets, meaning that the overall downtown vacancy rate remains unchanged at 5.4% quarter-over-quarter.

This change in Class A vacancies is largely attributed to companies moving into recently completed towers and leaving behind their older space, for example March & McLennan's recent move to 120 Bremner Boulevard from 161 Bay Street where over 178,000 square feet of space is now available. More space will be coming on the market Downtown over the few years with six office buildings currently under construction adding approximately 3.6 million square feet, of which 76.2% has been pre-leased. 832,528 square feet of new office space will be completed in 2015 alone, of which over 400,000 square feet is located Downtown. 

The Downtown South area - referred to by many as the South Core - is the most in-demand submarket right now, with over almost 156,000 square feet absorbed during Q2 2015, as many tenants relocate from the Financial Core to newer office space.

Full details are available from CBRE Market Watch.