TORONTO - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that the corporate real estate market in the Greater Toronto area continues to be one of the most active in Canada. The combined Class "A" and Class "B" office vacancy rate fell from 5.3% to 4.4% over the course of 2012 and activity was strong in both the Class "A" and Class "B" markets. Along with Calgary, Toronto leads the country in terms of new office developments and leasing transactions. Since 2008, over 1.2 million square feet per year of office space has been absorbed in the downtown district.
"Almost all of the office space in the new towers completed between 2008-2011 has been leased and the demand for premium-quality space continues to be strong with asking rental rates in these buildings rising," said Allan Schaffer, President/Broker of Record of Devencore Realties Corporation Canada Limited, Brokerage. "Over 3.5 million square feet of new tower space is scheduled to be completed by 2017; however, none will be ready before 2014, so this will have an impact on tenancy decisions and the sublease market in the coming months."
"In the GTA submarkets, vacancy levels have remained relatively stable," said Rob Renaud, Senior Vice President and Managing Principal/Broker of Record at Devencore Realties Corporation Canada Limited, Brokerage. "In the GTA West for example, activity has slowed somewhat, but there are a number of large developments underway that will have an impact on tenancy trends in the quarters ahead."
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.
"Vacancy rates should continue to edge downwards over the next twelve months putting pressure on asking rental rates to increase," Mr. Schaffer said. "The availability of sublease space is also decreasing and office space in the older Class "A" buildings offered up over the past few years as the new towers came onto the market is being steadily absorbed. Tenants will likely find the best options on a building-by-building basis."
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.
With roots dating back to 1929, Newmark Grubb Knight Frank's strong foundation makes it one of the most trusted names in commercial real estate. Its 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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Newmark Knight Frank Devencore
Devencore Realties Corporation
Canada Limited, Brokerage
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