Please find attached our Q1'13 Toronto Office Market Report.
SUMMARY: The Financial Core vacancy rate increased from 4.6% to 4.9% (quarter-over-quarter).
Activity since the beginning of the year has slowed. While it is difficult to predict if this is a short term pause or signs of a longer term trend, the latter seems more plausible.
4.6M SF of new development between 2009 and 2011 addressed 15-20 years of pent up demand. The new buildings filled up rather quickly despite a market downturn. The Big Four accounting firms all have new homes, as do many of the large law firms and financial institutions.
Looking ahead, 5.6M SF of new office space will be constructed between now and 2017, but pent up demand has largely been addressed and there are fewer big tenants looking for new space. Coupled with continued concerns in the global economy, a financing slowdown in the mining and resources sector, and tough times for the investment dealers, the Toronto office market may have some challenges ahead.
Recent transactions include Apple for 50,000 SF at Bremner Tower and Cisco for 100,000 SF at RBC WaterPark Place. Expect to hear an announcement soon for TSX/CDS at 100 Adelaide Street West (anchored by E&Y).
I hope you find these reports useful and invite you to contact me if you have any further questions. If you do not wish to receive future editions of this quarterly report please email your request to ...
@cbre.com.
Regards,
John