Canada Office Market First Quarter 2009
According to the Colliers report, the national average downtown office vacancy rate increased from 3.96% in the fourth quarter of 2008 to 4.53% in the first quarter of 2009 (an increase of 0.57 percentage points). However, downtown vacancy trends varied across cities. The greatest increase in the downtown office vacancy rate occured in Calgary, AB, registering and increase of more than 1.7 percentage points (from 4.64% to 6.40%). The downtown office vacancy rate increased in Toronto slightly from 3.98% to 4.23%. On the contrary, in downtown Montreal the average vacancy rate decreased slightly from 5.07% to 4.82%. The average suburban office vacancy rate registered a higher increase than the downtown vacancy rate. In particular, according to Colliers, the average suburban office vacancy rate increased from 6.79% in the fourth quarter of 2008 to 7.79% in the first quarter of 2009 (an increase of 1 percentage point). In general, the suburban office vacancy rate increased in all major Canadian office markets. The Edmonton suburban office market exprerienced the highest vacancy rate spike of over 5.6 percentage points (from 3.29% in the fourth quarter of 2008 to 8.94% in the first quarter of 2009). Ottawa was the only metropolitan area where the suburban office vacancy rare remained stable.
Colliers reports changes in office rents for class A space only. According to the figures reported, class A office rents declined in both downtown and suburban markets. The average decline in downtown office rents over the first three months of 2009 was 1.25%. Downtown office rent trends varied considerably both in terms of magnitude and direaction across metropolitan markets. In particular, office rents in downtown Montreal registered the highest increase of 5.66% while office rents in downtown Toronto registered the biggest drop of 8.4%. It should be noted that on an annual basis, downtown office rents were still higher by 3.97% from their first quarter 2008 level.
Rent changes in suburban class A office space were also mixed across metropolitan markets, but averaged a negative 2.64% at the national level. Class A Office rents in suburban Montreal registered the largest drop of 10.56% in the first quarter of 2009. On the contrary, class A office rents in suburban Vancouver registered the highest increase of 3.23%. It should be noted that on annual basis, suburban office rents were marginally higher by 0.53% from their first quarter 2008 level.
|
