CBRE Ltd. just released their first quarter stats for 2012 on Toronto's office rental market, accounting for the market's stance between January and April of this year. CBRE examines both the financial core as well as suburban office markets in order to provide information regarding economic health and vacancy rates, as well as news regarding new developments.
The report outlines a relatively flat first quarter, with vacancy sitting at a cozy 5.5% in the financial core. This number increased as you continue to look outside the core with exception in the North market, where it was lower at 4.3%. Overall, the GTA vacancy rate is sitting just below 8%, better than the high of 36% we saw during the 2009 recession.
The comparatively low vacancy rate in the core has spurred an increase in development, with GWL and bcIMC's 30-storey Bremner Tower in the developing Southcore Financial District expected to add 700,000 square feet of office space. CBRE lists other potential developments as Cadillac Fairview's 16 York at York Centre, Menkes 1 York and Oxford/TPA's 30 Bay Street. Add to this various smaller projects such as QRC West and it's clear that developers are looking at commercial development as a viable market.
The spur of commercial development naturally lags behind the low vacancy numbers, and has thus led to an increase in rental rates for tenants. While not drastic, the average rental rate downtown increased by $0.34 per square foot to $24.50 since the last quarter of 2011. Overall CBRE maintains a positive outlook on the market, and while it doesn't look to be making leaps and bounds anytime soon, it is relatively safe and secure.