Upswing Reported In Toronto West Office Market Scene
The Toronto West office market improved in Q4 2013 as most nodes showed a modest uptick, according to an Avison Young market report. Overall available space experienced the first notable decline since Q3 2012. A similar decline occurred in the overall vacancy rate. Sublease space remains prominent, especially in the Airport Corporate Centre (image), as the onset of new supply coming to market in 2014 continues to put the squeeze on older product in nodes with significant availability. According to the report, Toronto West office availability rate declined 90 bps to 15.5% from Q3 2013.
The overall strength in the leasing market was led by several well-performing nodes, including Meadowvale and Oakville, which saw their availability rates decrease to 11.1% and 17.6%, respectively. AY’s VP of research Bill Argeropoulos says the decision by heavy-hitters like WorleyParsons, RBC Financial Group, Meridian Credit Union and Sobey’s among others to continue to base themselves there is a testament to overall confidence in the market, further enhanced by a healthy construction pipeline. The recent Bayer sublease deal at 2920 Matheson Blvd E reduced ACC’s sublet availability by 135k SF. “Although the flight to higher-quality premises in new buildings typically results in increased rental rates, more landlords are offering generous rental incentives to attract quality tenancies,” says Avison Young Principal Joe Almeida (pictured).
