MONTRÉAL - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that vacancy rates in downtown Montreal's office buildings have fallen below 6%, and in 2011 just over 931,000 square feet of space was absorbed. Office space in the city's downtown district has not been absorbed at this rate since 2008, and should this pace be maintained, within three years downtown office buildings will approach full occupancy. Contiguous spaces greater that 25,000 square feet are becoming increasingly difficult to find, even the smaller blocks of space currently available in downtown Montreal exist in a relatively limited number of buildings.
"With office vacancy rates steadily declining and interest rates still at very low levels, the city's corporate real estate market is ripe for development," said Jean Laurin, President and CEO of Newmark Knight Frank Devencore. "Indeed, there are more investors and developers considering launching major projects in the downtown area than has been the case for over a decade. Should asking rental rates begin to climb, as we anticipate, development prospects should improve even further. Additionally, other areas on the fringes of Montreal's downtown district are also beginning to attract investor interest, so we may soon see pockets of redevelopment activity in the Mile End, in the former garment district on Chabanel, in the Atwater Market area and in Griffintown."
Overall Class "A" and Class "B" vacancy rates in Canada's other major cities also fell significantly over the past year, from 6.8% to 4.7%, even though the total inventory of built space across the country increased by nearly two million square feet, due in large part to the new developments that came online in Calgary and Toronto. What is equally reflective of the strength of the market is the fact that office space in the new state-of-the-art towers has been in particularly high demand, despite its premium cost. The success of these projects, even in the midst and the aftermath of a global economic crisis, has spurred further development activity.
"The development and pre-development activity currently taking place is energizing downtown Montreal's real estate scene, and we expect that the announcement of at least two large-scale projects could happen relatively quickly," Mr. Laurin said. "This is significant news, as there have been only two major office-building projects in the Greater Montreal area in the last decade, with the completion of Phase 2 of E-Commerce Place in 2004 and the delivery of the Bell Canada campus on Nun's Island in 2009."
About Newmark Knight Frank Devencore
Devencore is the Canadian partner of Newmark Knight Frank, one of the largest real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.
About Newmark Knight Frank
Newmark Knight Frank is one of the largest real estate service firms in the world. Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank together operate from more than 240 offices in established and emerging property markets on five continents. With a combined staff of more than 7,000 and revenues last year exceeding $993 million, this major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark Knight Frank is a part of BGC Partners, a leading global brokerage company primarily servicing the wholesale financial markets. For further information, visit www.bgcpartners.com.
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