2018 forecast: vacancy rates vary
Downtown office vacancy rates in Calgary were as high as 27 per cent compared with just 4 per cent in Toronto and 8 per cent in Vancouver this past fall.
Altus Group, a real estate services firm, tracks real estate development in some of Canada’s biggest cities, and Ray Wong, a company vice-president, said he expects some flattening in Calgary’s rate in 2018.
In Vancouver, on the other hand, there’s simply not enough space to meet demand. “Vancouver is surrounded by ocean and mountains and there’s a shortage of available land,” Wong said. He added that a couple of new office projects should alleviate some demand constraints in the next year and a half.
The economy, of course, is a direct factor, too. “As people gain employment, that has a positive impact on the retail sector with increased demand and spending of sectors impacting on retail and commercial store demand,” adds Wong.
Other cities mostly fell in between. Halifax was 15 per cent, Edmonton was 13.4 per cent, Ottawa was 11.4 per cent, Montreal was 11 per cent and Quebec City was 8.4 per cent.
Generally, the percentages were higher for areas outside a downtown, and Wong cautioned there is nuance in the numbers. For instance, he pointed out, Montreal’s rate sounds high but the current office vacancy rate is expected to decrease based on demand in the technology and business services sectors. “Montreal’s tech sector, especially on the gaming side, has been growing, so that 11 per cent rate is a little bit misleading because there’s good demand in that marketplace.”
For the coming year, nationally, Wong said he anticipates continued demand from the commercial sector. “It should go at the same pace — not exorbitant growth but a good reasonable demand for space.”