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 risen slightly since the beginning of the year from 6.0% to 6.2%, which represents the freeing up of approximately 125,000 square feet of office space. At present, approximately 2.9 million square feet is available for lease or sublet. Over the past two years, vacancy rates in Montreal's downtown core have been essentially stable; in mid-2011, for example, the vacancy rate was 6.1%. However, the market has rebounded significantly from the 2008-2009 recession, when combined Class "A" and Class "B" vacancy rates reached 8%.
"Perhaps the most interesting story regarding downtown Montreal's real estate landscape concerns the amount of activity taking place behind the scenes," said Jean Laurin, President and CEO of Newmark Knight Frank Devencore. "Two new office towers are under construction and a wide range of other developments in the pre-leasing stage. In addition, a number of neighbourhoods in or around Montreal's downtown core are currently in the midst of significant rejuvenations. Multiple purposes and demands are being served, and among the initiatives in progress we are seeing significant condo and retail hub developments as well as smaller, more intimate office projects designed to attract businesses and groups in the cultural, multimedia and gaming sectors."
In the rest of the Canada, combined Class "A" and Class "B" vacancy rates have climbed only slightly through 2013, from 4.5% to 4.9%, reflecting a relatively flat economy. At the same time, it should be noted that the country's total inventory of built office space has increased considerably over the past two years, from approximately 207.7 million square feet in mid-2011 to 210.9 million square feet today.
"The activity taking place with developers, large tenants and investors indicate a market that could enter a very dynamic phase," Mr. Laurin said. "The numerous projects currently under consideration ultimately will be driven by the needs of larger occupiers; how many companies require 100,000-square-foot-plus office spaces remains to be seen. In the meantime, tenants can best adapt to swiftly evolving market conditions by performing a needs' analysis up to five years in advance of their current lease expiry dates."
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 (NGKF) is one of the world's leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, NGKF employs more than 12,000 professionals, operating from more than 320 offices in established and emerging property markets on five continents.
With roots dating back to 1929, NGKF'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, NGKF serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.ngkf.com.
NGKF is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.
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