Investment activity in the sector surged during Q4 2021, new report says
The Toronto office market saw a significant rebound in its valuation in the fourth quarter of 2021 after spending seven consecutive quarters as the region’s least-traded asset class, according to Avison Young.
Total investment activity in the sector reached $1.4 billion in Q4, increasing by 106% on a quarterly basis and accounting for 18% of the GTA’s total for that period. The Toronto office market’s full 2021 total reached nearly $2.8 billion, up by 99% annually.
“Suburban assets continued to predominate among the quarter’s largest transactions, accounting for four of the top five,” Avison Young said. “Downtown activity will likely receive a boost in the first quarter of 2022 with the pending sale of Royal Bank Plaza by Oxford Properties and CPP.”
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Data from CBRE indicated similar trends, registering a Q3-Q4 decrease in downtown Toronto’s office vacancy rate from 9.9% to 9.7%.
“We have seen a huge pickup in demand for Toronto and Vancouver,” said Jon Ramscar, CBRE’s managing director for downtown Toronto. “We are not seeing it slow down.”
CBRE is anticipating the tech sector to spearhead the resurgence of the office market in Canada’s largest cities.
“The pandemic has accelerated the digital transformation of our businesses and economy,” said Juana Ross, Toronto research director at Cushman & Wakefield. “We are looking at tech leading the recovery and becoming one of the biggest demand drivers in office space in Toronto for the foreseeable future.”
