Canada Update: Tenants Snap Up Office Space in Q1
Vacancy rates improved in Canada’s office and industrial markets in the first quarter of 2011, according to commercial real estate firm CB Richard Ellis (CBRE). The national vacancy rate for office space dropped to 9.3 percent, compared to 10.1 percent last year, with tenants leasing significantly more square feet of space--704,431--compared to last year’s final tally--441,310 square feet. Construction also increased, with 5.6 million square feet of space being developed, compared to 3.8 million square feet a year ago.
Canadian commercial real estate experts have credited lower rents and better amenities, which are wooing tenants into new space, for the country’s improving market. “Each market has its own nuances, but the national trend is positive absorption and lower vacancy rates with steady rental growth,” said CBRE vice-chairman John O’Bryan.
“As space is absorbed, owners hope to be in a position to begin moving rents higher,” noted O’Bryan. “We’re seeing no letup in demand from investors in the Canadian commercial real estate market who are feeling comfortable about acquiring additional assets because the economic fundamentals in Canada are strong and interest rates are compelling,” he added.