There was a drop in commercial leasing of 17 per cent in May compared to a year earlier but there’s a more optimistic outlook.
Toronto Real Estate Board members reported 377,352 square feet of combined industrial, commercial/retail and office space leased through the board’s MLS on a per square foot net basis with pricing disclosed.
Lease rates were down more than 6 per cent for industrial units ($5.59 per sq. ft) while commercial/retail and office rates gained due to an increase in smaller units which tend to have higher rates.
Sales of commercial units totalled 74 in May, in line with the 78 sold a year earlier, but sales prices were up strongly, with a 58 per cent rise for industrial units (average price $140.33 per sq. ft.); a 74 per cent rise for office buildings ($316.23); and an 88 per cent rise for commercial/retail ($148.96).
“Economic growth was very strong in the first quarter, including a robust uptick in business investment, which speaks to confidence. If firms are confident enough in their future growth prospects to purchase new equipment and supplies, they may also have plans to invest in more space. A resurgence in exports as we move through 2017 would also be welcome and would likely prompt an increase in demand for commercial real estate in southern Ontario as well,” said TREB president Larry Cerqua.