“As of Q3 2014, 20.7 million square feet were under construction in the Canadian markets … amounting to 4.6 per cent of existing inventory,” Colliers said in the report. “The Canadian economy should continue to grow through the remainder of 2014 and 2015, benefiting from the ongoing recovery of the U.S. economy, energy sector growth and expansion of the professional scientific and technical services sector – an important driver of demand for office space in markets including Vancouver and Toronto.”
Canadian commercial vacancy rates fell 10 basis points to 8.4 per cent in the third quarter of 2014, mainly due to under-construction projects across all major metropolitan areas. Vacancy rate rises in Vancouver were offset by declines in Toronto and Calgary.
Canada is also adding jobs – 157,600 position were created year-to-date – further boosting the need for commercial office space. Real GDP, too, is expected to show moderate increases, followed by accelerated hikes in 2015.
“At the local level, Edmonton and Calgary are projected to remain among the fastest growing markets in terms of real GDP in 2014 … due to continued growth in the energy industry and its spillover effect on other sectors,” the report stated. “Vancouver is forecast to be the fastest-growing metro area with job gains in virtually every sector through 2018.”
But, Canada still remains the top investor in U.S. commercial property. Avison Young recently joined the long list of brokerages acquiring major square-footage stateside. Earlier this month, it announced the acquisition of two Florida-based firms – Morrison Commercial Real Estate and Abood Wood-Fay Real Estate Group – though it didn’t provide details of that exchange.
Since 2010, Canada has spent $43.4 billion in the commercial market in the States – four times as much as China, the second biggest spenders in the U.S. market.
A dearth of commercial space in Canada has seen a growing number of Canadians buy down south, but that’s poised to change as a new report suggests local agents are in for their own boom in 2015.