Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

September 02, 2015 07:30 ET

Newmark Knight Frank Devencore Reports on Robust Toronto Office Market

Developers Bullish on Projects Outside Downtown Core

TORONTO, ONTARIO--(Marketwired - Sept. 2, 2015) - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that combined Class "A" and Class "B" office vacancy rates in downtown Toronto have risen to 6.8% in the first half of 2015 as the inventory of space continues to grow. Over the past twelve months, over 2.5 million square feet of new office space has been added to the market.

"Tenant demand for this class of space has remained very strong," said Allan Schaffer, President/Broker of Record of Devencore Realties Corporation Canada Limited, Brokerage. "The financial services, hi tech and entertainment sectors are driving much of the demand. Moreover, with the success of projects such as the 500,000-square-foot Globe and Mail Centre at 351 King Street East and the 300,000-square-foot QRC West at 134 Peter Street, the traditional boundaries of the downtown core continue to expand."

With this expansion of the downtown core, developers are increasingly bullish on the opportunities that exist to the east and west of Toronto's Financial District.

To the east, two significant developments have already been completed: the 500,000-square-foot, LEED Gold Globe and Mail Centre at 351 King Street East, and the 360,000-square-foot mixed-use development at 333 King Street East, which has Coca Cola and George Brown College as its anchor tenants. Other projects are on the way.

On the western perimeter of the downtown area, a number of landmark developments have also been brought to the marketplace, including QRC West at 134 Peter Street, a 300,000-square-foot development that artfully combines a modernized historic building and a new tower and is virtually fully leased. In 2015 another project will be delivered at 460 King Street West, a four-storey heritage redevelopment property. It has already been fully leased.

In the GTA West, the combined Class "A" and Class "B" vacancy rate continues to track above 12%. Much of the available space is found in the Airport East area along Airport Road where a majority of the inventory is three or four decades old.

"A flight to quality characterizes the market and clearly favours the newer buildings that conform to LEED standards," said Rob Renaud, Senior Vice President and Managing Principal/Broker of Record at Devencore Realties Corporation (Toronto West) Ltd., Brokerage. "Over 1 million square feet of space is currently being built, primarily in the ACC, Meadowvale and Oakville areas. As a result, landlords managing the older inventory must compete more aggressively to secure tenants."

Most of Canada's largest cities have seen increases in office vacancy rates in 2015. In Calgary, where the energy sector drives the local economy, the combined Class "A" and Class "B" vacancy rate in office buildings jumped from 4.4% to 6.2% over the last six months of 2014, and rates in Montreal also climbed as new inventory was delivered. There were more moderate increases in vacancy rates in Toronto, Edmonton, Winnipeg and Halifax, while rates were essentially unchanged in Vancouver over the same period. One of the factors affecting the rise in the country's overall vacancy rates is the new inventory that continues to be built. Over 4 million feet of office space was added to the market inventory in 2014 alone.

About Newmark Knight Frank Devencore

As part of Newmark Grubb Knight Frank, one of the world's leading commercial real estate advisory firms, Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage, exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.

About Newmark Grubb Knight Frank

Newmark Grubb Knight Frank is one of the world's leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF's 12,800 professionals operate from more than 370 offices in established and emerging property markets on six continents.

With roots dating back to 1929, NGKF's strong foundation makes it one of the most trusted names in commercial real estate. NGKF's full-service platform comprises BGC's real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.

NGKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC's common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit http://www.bgcpartners.com/.

Contact Information

  • Allan Schaffer
    President
    Broker of Record
    416-366-0366, ext. 231
    Newmark Knight Frank Devencore
    aschaffer@devencorenkf.com

    Rob Renaud
    Senior Vice President and Managing Principal
    Broker of Record
    416-366-0366, ext. 241
    Newmark Knight Frank Devencore
    rrenaud@devencorenkf.com

    Devencore Realties Corporation
    Canada Limited, Brokerage
    130 Adelaide Street West, Suite 2929
    Toronto, Ontario M5H 3P5

    Devencore Realties Corporation
    (Toronto West) Ltd., Brokerage
    1 Eva Road, Suite 409
    Toronto, Ontario M9C 4Z5