A low Canadian dollar is expected to increase demand for industrial space in the GTA, according to a new report – that despite a 25 per cent drop in leased commercial space compared to a year ago.
"Recent economic data suggests that we could see an uptick in the demand for commercial space moving forward, given that the Canadian economy expanded at a relatively strong pace over the past two quarters,” said TREB president Paul Etherington.
That kind of growth may be hard to see in the latest TREB market numbers.
The association’s members reported 470,604 leased square feet of industrial, commercial, retail and office space this November, down 25 per cent compared to the 624,924 square feet of combined space leased in November 2013.
The numbers indicate a push for commercial real estate, but also highlight both positive and negative results based on the mix of properties sold this year compared to last.
“On top of this, the dip in the value of the Canadian dollar vis-à-vis the US could result in increased demand for goods produced in the GTA for export south of the border,” he added. “This could lead to an increase in the demand for industrial space in the GTA as well.”
The number of combined industrial, commercial/retail and office transactions in November was unchanged compared to the same period in 2013. Overall, there were 67 transactions for which pricing was disclosed.
Year-over-year changes in average lease rates in November for industrial and commercial/retail properties were up to $5.29 per square foot net and $22.31 per square foot net respectively.
The large increase in the commercial/retail segment was due, in large part, to the existence of a larger property which leased for a below average lease rate in November 2013. Average office lease rates were down 5.2 per cent to $13.27per square foot net.