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Canada's National office vacancy drops
22 Nov, 2006, Toronto
Western Canada remains hot, while Toronto’s proves its mettle
National office vacancy rates will drop across the country to 6.7 per cent by the fourth quarter of 2007, from 7.1 per cent in the third quarter of 2006.
The 2007 Annual Survey and Market Outlook released today by Cushman & Wakefield LePage shows drops in vacancy rates in five of the six major markets, including Vancouver, Calgary, Winnipeg, Toronto and Montreal.
Only Ottawa is trending upward in terms of vacancy rate. The nation’s capital region remains a good news story, however as almost 1.4 million square feet of inventory is coming to market before the end of 2007 and absorption will be in excess of one million square feet.
“The fundamentals of the Canadian office market are strong,” said Paul Morse, Senior Vice President and General Manager of Office Leasing for Cushman & Wakefield LePage. “There is a solid pipeline of new supply across the country – and the market is absorbing it efficiently.”
The next 12 months will see a construction boom across much of Canada, particularly in Toronto, Vancouver, Ottawa and Calgary – however, high demand, tempered by a shortage of construction workers, will continue to frustrate tenants in Western Canada through 2007 and they will be inclined to consider relocating or delaying hiring new staff as space becomes even more of a premium.
In Toronto, which accounts for 42 per cent of the office space in Canada, vacancy will fall modestly over the course of 2007 to 7.2 per cent from 7.5 per cent in the third quarter of 2006.
A slowing economy in the United States, the high Canadian dollar and lower demand for goods from south of the border have all had a negative impact on the manufacturing sector in Central Canada, driving speculation that the Toronto and Montreal office leasing markets will see increasing vacancy rates.
“The economic trends have not caused any substantial downturn for the office leasing market,” said Morse, “In fact, in 2007 there will be significant growth in the office-using professions like financial services and professional services.”
The full 2007 annual Outlook by Cushman & Wakefield LePage is available online at www.cushmanwakefield.com.
Cushman & Wakefield LePage is the Canadian operation of Cushman & Wakefield, the world’s largest privately owned commercial real estate services firm with more than 11,000 professionals in 195 offices in 55 countries. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process. These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services. To find out more about Cushman & Wakefield, visit www.cushmanwakefield.com
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