The head of a large real estate services firm recently stated that the trend of steady growth in the Canadian tech industry will fuel more demand for next-generation office spaces, a development that might provide a significant boost to the country’s commercial property sector.
In particular, markets like Vancouver, Toronto, Kitchener-Cambridge-Waterloo, and (to some extent) Montreal will be seeing lower vacancy rates for office properties over the next few years, according to Jones Lang LeSalle (JLL) president Brett Miller.
“All of those markets are getting to a tighter supply point in the cycle,” Miller told BuzzBuzzNews
. “I would imagine that there will be some bullish developers who will go ahead with construction in order to meet the [demand].”
The latest edition of JLL’s Canada Technology Outlook stated that tech companies are hiring 2.8 per cent of the country’s workers (for a total of 503,000 workers) as of Q2 2016. The report added that the industry accounted for 15.8 per cent of leases for office spaces 20,000 square feet and larger in the first half of 2016.
“The tech sector has seen robust employment growth, fueling their need for real estate,” JLL noted.
In late November, Allied Properties REIT chief executive officer Michael Emory stated that demand for commercial real estate in the country’s leading markets—and in red-hot markets like Toronto, in particular—won’t slow down in the near future, especially considering Donald Trump’s surprise win.
“The outlook in the next 24 months for Toronto office demand in my opinion is very, very good. There’s even a shortage [of leasable office space] in certain areas of the city,” Emory explained.
“Certainly post-Brexit, there was a discernable [sic] flow of funds into Canada because of its, perhaps, safe-haven status, and it’s not unreasonable to think that post-the current election in the United States we may see a similar flow for the same reasons.”
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