The region's tenants continue to make plans for their spaces despite pandemic risks
The Greater Toronto Area office market has seen its second straight quarter of stable and promising results, according to Avison Young.
During Q1 2022, the region saw net absorption of 318,000 square feet (sf) of office space, while vacancy edged up by 20 basis points (bps) quarter-over-quarter to 9.2%. Major boosts came in the form of five new building completions totalling nearly 994,000 sf, Avison Young said.
The trend is being impelled by tenants continuing to make future plans for their spaces, despite another wave of COVID-19 infections that delayed many Q2 return-to-office intentions.
“The prospect of a sustained, large-scale return to office by many prominent organizations starting in April has many stakeholders feeling optimistic about the market’s potential performance through the end of the year,” Avison Young said.
Read more: How are Canadians feeling about returning to the office?
This was particularly apparent in downtown Toronto, where availability and vacancy rates both increased by 50 bps on a quarterly basis, to 14.1% and 8%, respectively.
“Delivery of new supply contributed to the rising vacancy rate, although net absorption was remarkably flat during the quarter, as the market gained only 1,400 sf in occupancy,” Avison Young said.
“Tenants continue to explore available space options as they look to the future. Ever-rising construction costs have increased demand for built-out spaces, whether in the form of show suites, subleases or co-working facilities.”
