MONTRÉAL - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that vacancy rates in downtown Montreal's Class "A" and "B" office buildings have remained in the 6.0% range over most of the past twelve months in a leasing market where demand slowed. Approximately 1.5 million square feet is currently vacant in the downtown Class "A" sector, and 1.3 million square feet is available in Class "B" buildings. However, with two new office towers underway and a host of other projects in the pre-development phase, the complexion of the downtown Montreal office market is about to change.
"For the first time in a decade there are new office tower projects in the development and pre-development phases in Montreal's downtown district," said Jean Laurin, President and CEO of Newmark Knight Frank Devencore. "Condo development is also on the rise downtown, and the success of the La Tour des Canadiens project should spur further activity and help to rejuvenate certain neighbourhoods in and around the downtown core over the long term. Additionally, we are seeing increasing interest from tenants and investors in the city for older spaces and properties outside the traditional downtown core. The uptick in demand for smaller, less traditional spaces is being driven by growing businesses in the cultural, multimedia, gaming industries, for which the lower cost and cachet of the older converted buildings is a real selling point."
Corporate real estate markets across the country also showed a slower pace of growth in 2012. The overall vacancy rate in office spaces in Canada's major cites fell from 4.7% to 4.5% over the course of the year, and the amount of available space declined by approximately 245,000 square feet. Approximately 9.6 million square feet of office space is currently available for lease or sublet in the country's downtown areas.
"We anticipate a relatively healthy amount of leasing activity through the rest of 2013," Mr. Laurin said. "There is a continuing demand behind the scenes for prime office space in downtown Montreal, and for less traditional office and loft space outside the core. The new development and pre-development activity currently taking place will provide tenants with somewhat more leverage. One or two leasing decisions by larger tenants seeking space in downtown Montreal could accelerate development activity in the months ahead."
About Newmark Knight Frank Devencore
As part of Newmark Grubb Knight Frank, one of the world's leading commercial real estate advisory firms, 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 Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world's leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
Newmark Grubb Knight Frank's integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
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