Filed Under Market Info, News · Tagged: Avison Young releases 2012 commercial real estate forecast, LinkedIn
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Leasing activity was strong across Canada’s office markets in 2011, with vacancy rates decreasing and rental rates trending upward in most markets nationwide. Canada’s overall office vacancy rate has declined steadily from 9.2% at the depths of the recession in 2009, to 8.3% in 2010, to 7.6% in the closing months of 2011 – solidifying the recovery.
Six of the 12 Canadian markets surveyed experienced a decrease in vacancy rates of varying degrees in 2011. Surprising many market observers, Calgary posted the most impressive improvement over 2010 with vacancy plummeting 340 bps to 7.2% as 2011 drew to a close. From West to East, vacancy rates also fell in Vancouver (-80 bps to 7.6%), Lethbridge (-50 bps to 9.4%), Mississauga/GTA West (-40 bps to 11.6%), Toronto (-70 bps to 7.9%) and Montreal (-60 bps to 8.6%). From West to East, those markets that witnessed a rise in office vacancy included Edmonton (+90 bps to 10%), Winnipeg (+40 bps to 6.9%), Ottawa (+40 bps to 5.6%) and Quebec City (+20 bps to 4.7%). Regina remained unchanged at 1% – the tightest office market in the country once again.
Looking ahead, the national office vacancy rate is forecast to decline an additional 60 bps to end 2012 in the 7% range. While vacancy rates are expected to hold steady in Montreal (8.6%) and Ottawa (5.6%), rates are expected to trend lower in Vancouver (-120 bps to 6.4%), Calgary (-200 bps to 5.2%), Edmonton (-140 bps to 8.6%), Lethbridge (-20 bps to 9.2%), Mississauga/GTA West (-100 bps to 10.6%) and Toronto (-70 bps to 7.2%). Conversely, due to some much needed supply, Regina will see its vacancy rate climb 320 bps to 4.1% by the end of 2012. Other markets that are expected to see an uptick in vacancy include: Winnipeg (+10 bps to 7%), Quebec City (+60 bps to 5.3%) and Halifax (+130 to 10.3%).