Office space in Canada’s major cities is still relatively tight, putting the market in good shape to weather the recession, though Calgary and Toronto face more challenging times than others, according to a report yesterday by the Canadian arm of a global real-estate firm.
“Canada’s office market is well positioned going into the projected recession, thanks to its strong performance during recent years that drove vacancy rates down to historically low levels and continued to drive rents higher through 2008,” said Colliers International in Canada in its report on office space in six major Canadian cities — Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver.
“These strong market indicators, coupled with a limited supply of new office space in most markets, will help the office market to weather the current economic slowdown,” the report said.
Without any significant new projects planned in Vancouver’s downtown area until at least 2012, that market is in a good position to mitigate challenging economic conditions, the report said, noting that another positive factor is the 2010 Olympic Games, which has created demand for office space.
However, because of the long lead time on new real-estate developments this means that several million square feet of new office space will be coming on the market in difficult times in Toronto and Calgary, posing additional challenges in those markets, cautioned Ian MacCulloch, vice-president, research with Colliers International in Canada.