Photo: James Paolo/Flickr
Despite 1.6 million square feet of Downtown Toronto office space coming online in the fourth quarter of 2014, conditions remained tight in early 2015. The downtown vacancy rate actually declined from 3.5 per cent in the fourth quarter to 2.7 per cent in Q1-2015 according to Colliers new report on the GTA office market.
The real estate company expects vacancy rates to stay low throughout the year thanks to high demand and a number of new office spaces, such as 351 King West, arriving on the scene entirely pre-leased.
Many of the building owners and institutional funds that own the prime office stock aren’t in any hurry to sell off their assets in a market where demand appears to keep rising. However, there were still a couple of major sales in the first quarter, such as GWL Realty Advisors picking up 296,992 square feet of space at the Yonge Richmond Centre for $153,800,000.
“With the overall improvements currently underway at Union Station set to be completed this year, the desire to locate along the PATH system will become a greater locational imperative,” noted Colliers in their assessment of downtown demand.
Another area that could see a boost in demand is the Midtown market. Though the vacancy rate was relatively unchanged from the fourth quarter of 2014 to the first quarter of 2015, Colliers believes the major mixed-use project The One at Yonge and Bloor, plus all the new condos currently under construction around Bloor Street, will boost interest in the market.
In contrast, York, Durham, Peel and Halton Region all experienced an increase in overall vacancy rates during the first quarter of the year. Colliers says the tech sector is leading the demand for office space across the GTA.