GTA Office Market Report Toronto Q4 2020
• Vacancy across the city increased this quarter to 6.2%. The downtown market had the highest YoY vacancy rate growth by climbing 320 bps to 4.3% in Q4 2020. • Downward pressure on rents began to surface this quarter, with lower averages recorded across submarkets relative to Q3. • The proportion of sublease availability compared to total availability across the GTA continued to climb this quarter, resting at 22.7% as of Q4 2020. • Looking forward to 2021, an adjustment in price expectations between landlords and tenants will be imperative to propelling transaction activity.
• Vacancy across the city increased this quarter to 6.2%. The downtown market had the highest YoY vacancy rate growth by climbing 320 bps to 4.3% in Q4 2020.
• Downward pressure on rents began to surface this quarter, with lower averages recorded across submarkets relative to Q3.
• The proportion of sublease availability compared to total availability across the GTA continued to climb this quarter, resting at 22.7% as of Q4 2020.
• Looking forward to 2021, an adjustment in price expectations between landlords and tenants will be imperative to propelling transaction activity.
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Market Metro
Overview
01
Rental Rates by Building Class
02
Weighted Average Asking Net Rates ($PSF)
Rental Rate Growth*
By Market | Q4 2019 – Q4 2020
$50
$40
$30
$20
$10
$0
AAA
AAA
A
B
A
C
B C
A
A
A
B
B C
B
C
C
Downtown Midtown GTA N/E GTA W GTA Total
Downtown -6%
Midtown
7%
GTA N/E
3%
GTA W
2%
GTA Total
9%
*Weighted Average Asking Net Rent
03
Leasing Activity by Industry
By Square Feet Leased
FIRE and TAMI
represents 44%
of all leases in
Q4
FIRE | Financial Services,
Insurance and Real Estate
TAMI | Technology, Advertising,
Media and Information
HEG | Healthcare, Education and
Government
ACE | Accountants, Consultants,
Engineers
Legal
Other
04
320 bps
Downtown
1.1% Q4’19
GTA W
8.0% Q4’19
Vacancy Rate by Market
Q4 2019 – Q4 2020
170 bps 190 bps
Midtown
1.6% Q4’19
160 bps 220 bps
GTA Total
4.0% Q4’19
GTA N/E
4.9% Q4’19
Net Absorption / New Supply (SF)
05
1,500,000
1,000,000
500,000
0
-500,000
-1,000,000
Historical Overview
Vacancy vs. Net Absorption and New Supply
Vacancy Rate Net Absorption New Supply
6.2%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
Vacancy
-1,500,000
Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20
-8.0%
Colliers Canada | GTA Office Market Report | Q4 2020
collierscanada.com/research P.2