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Canadian CRE economy has been booming even during the pandemic. According to industry experts, as the market enters a post-pandemic recovery, it is expected to remain on an upward economic trajectory post COVID.
Here are some of the most notable findings from the latest CBRE report on Canadian CRE’s post-pandemic economic upswing. The numbers are very promising.
Office Vacancies Start Decreasing
Office vacancies in Canada have been increasing slightly since the pandemic started, but that upward trend recently took a turn. Every major city in Canada is expected to see lower vacancies, as employees plan to return to the office setting by the end of the year.
Canadian office properties seems to be on the right track to get back to normalcy with higher downtown office leasing.
At 6.6%, Vancouver has the lowest vacancy rates at the moment. Toronto, Ottawa, and Montreal are not too far behind, with vacancy rates of 10%, 10.6%, and 11.1%, respectively.
Halifax has higher office vacancy rates, but they keep decreasing as well. Nova Scotia’s capital has a downtown office vacancy of 19.7%, while its suburban office vacancy is 13%.
Office Sublets in High Demand
During the pandemic, most companies were subletting their offices as their employees started working from home. As workers begin slowly returning to the offices, there are starting to be fewer sublets on the market.
According to CBRE, almost 90,000 square metres of office space was on sublease until recently. All that space is now reoccupied, as some sublets were cancelled and others leased by new companies. Half of all those sublets are in Toronto.
This positive trend for office space is the reason why CBRE vice-chairman Paul Morassutti commented that, “Canada’s major office markets have fared well over the past year compared to our global counterparts, and we can expect the momentum to continue to build as lockdowns are eased.”
Strong Demand for Industrial Real Estate
Another reason why Canadian CRE is booming post-COVID-19 is the higher demand for industrial real estate properties.
With 0.9%, the lowest availability rate in all of North America belongs to Waterloo Region.
The available space for industrial businesses in Vancouver dropped by 35% in the second quarter of 2021, reaching a 1.1% availability rate.
The space for industrial leases and purchases dropped by 28% in Montreal, arriving at a 1.4% availability rate.
Toronto also experience a decrease of 25%, which brought the city’s availability rate to 1.2%. In Calgary and Edmonton, the rates dropped by 1.2% and 0.7%, respectively.
Thanks to the decline in office vacancies and lower industrial availability rates, Canadian CRE is bound to keep thriving. There is only but so much available space and the demand is steadily rising.
This is excellent news for CRE investors and developers looking for profitable investment opportunities in Canada. The country offers a plethora of those, which is a trend that even the pandemic could not derail.