Colliers Canada National Market Snapshot 2021Q1

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Q1 2021 brought both the vaccine rollout but also renewed lockdowns, however, this time around many businesses knew how to respond, resulting in minimal job losses. Although sublet space remains an issue, the flood of space coming to the market has slowed, and some believe as 2021 progresses, and employees start returning to the office, we will start to see more sublet offerings being removed from the market.

Colliers Canada is pleased to present our 2021 Q1 National Market Snapshot, with national statistics and regional market insights including vacancy rates and average net asking rents for office and industrial fundamentals in 11 key markets across Canada.

Colliers Canada

National

Market

Snapshot

Q1 2021

Accelerating success.


Q1 2021

Canada Office

Office | Industrial |

Overview

Market

Vacancy

Rate

QoQ

Sublet as % of

Vacancy

QoQ

Net Asking

Rent (PSF)

QoQ

Victoria 6.1% 4.0% $23.00

Vancouver 6.0% 36.2% $25.86

Edmonton 18.7% 14.6% $18.54

Calgary 27.8% 24.0% $13.16

Regina 13.5% 24.7% $16.80

Winnipeg 12.9% 5.0% $14.20

Waterloo 15.7% 17.6% $14.91

Toronto 7.2% 25.0% $21.83

Ottawa 9.4% 14.6% $16.74

Montréal 11.7% 17.1% $17.60

Click the map markers or use the

navigation bar below to find out more

Halifax 14.8% 3.5% $16.05

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Q1 2021

Canada Industrial

Office | Industrial |

Overview

Market

Vacancy

Rate

QoQ

Sublet as % of

Vacancy

QoQ

Net Asking

Rent (PSF)

Victoria 0.7% 0.0% $15.61

Vancouver 1.0% 16.3% $14.09

QoQ

Edmonton 7.0% 7.1% $9.52

Calgary 5.4% 8.7% $9.38

Regina 4.2% 4.9% $10.27

Winnipeg 3.7% 3.8% $7.70

Waterloo 2.3% 15.2% $6.79

Toronto 0.5% 9.0% $10.54

Ottawa 1.7% 18.3% $11.30

Montréal 1.4% 8.3% $7.98

Click the map markers or use the

navigation bar below to find out more

Halifax 4.9% 3.0% $8.41

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Canada Overview

Office | Industrial |

Office Fundamentals

Vacancy Rate

Overview

Avg. Asking Net Rent

Key Findings

• Q1 2021 brought both the vaccine rollout but also renewed lockdowns, however, this

time around many businesses knew how to respond, resulting in minimal job losses.

Although sublet space remains an issue, the flood of space coming to the market has

slowed, and some believe as 2021 progresses, and employees start returning to the

office, we will start to see more sublet offerings being removed from the market.

• Despite both downtown and suburban office rents decreasing, the overall average

continued to increase due to the larger proportion of higher-priced downtown space.

However, asking rents have not decreased as much as expected, as landlords prefer to

make concessions on shorter lease terms, free rent and other TIs. Office tenants

facing renewals are asking for shorter terms in order to mitigate the uncertainty

related to work-from-home vs. the return to the office.

12%

11%

10%

9%

8%

7%

6%

11.4%

$17.75

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

Industrial Fundamentals

$20

$19

$18

$17

$16

$15

$14

Avg. Asking Net Rent (PSF)

• The industrial market continues to experience demand from all sectors, resulting in

strong positive absorption this quarter, continued vacancy compression, and upward

pressure on rents. Industrial development activity has increased as well, however, it

will unlikely be able to keep pace with demand, resulting in a chronic shortfall of

industrial space. As such, development proformas include strong rent growth

expectations, which is ultimately further driving up land prices.

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial QoQ

Vacancy Rate 11.4% 11.4% 11.4% 1.9%

Total Vacancy (SF) 35,496,656 35,396,758 70,893,414 36,859,239

Direct Vacancy (SF) 26,730,866 29,177,782 55,908,648 33,746,581

Vacancy Rate

Avg. Asking Net Rent

Sublet Vacancy (SF) 8,804,976 6,211,692 15,016,668 3,146,295

6%

$12

Industrial Availability Rate - - - 3.3%

5%

4%

3%

2%

1%

0%

9.45

1.9%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$11

$10

$9

$8

$7

$6

Avg. Asking Net Rent (PSF)

Industrial Available Space (SF) - - - 63,001,110

Avg. Asking Net Rent (PSF) $17.79 $16.48 $17.75 $9.45

Net Absorption (SF) -3,211,652 -2,607,615 -5,819,267 8,319,222

Net Absorption (SF) - YTD -3,211,652 -2,607,615 -5,819,267 8,319,222

New Supply (SF) 41,466 675,242 716,708 3,389,415

New Supply (SF) – YTD 41,466 675,242 716,708 3,389,415

Under Construction (SF) 14,267,461 6,048,434 20,315,895 26,823,527

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Victoria Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

Key Findings

• An interesting dynamic persists for the Greater Victoria Area office market, in

that downtown vacancy remains stable while suburban vacancy continues to

be on the rise, specifically for Class B and C buildings.

• Net asking rates for office have remained steady for most Class A office

buildings, whereas they fluctuate across Class B and C buildings, depending on

building and ownership, portfolio vacancy, as well as nearby competing options.

8%

7%

6%

5%

4%

3%

6.1%

$23.00

$28

$27

$26

$25

$24

$23

Avg. Asking Net Rent (PSF)

• The industrial market in Greater Victoria remains incredibly tight. Although

there is some availability, there are no active listings for vacant industrial space.

When space does become available, whether it be for sale or lease, it is

almost immediately bought or leased.

• Industrial rental rates have consistently been in the $15 to $16 PSF range, but

due to steady demand and limited supply, rents for some spaces are starting

hover above $17 PSF.

2%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$22

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

6%

$15.61

$16

Vacancy Rate 7.3% 4.5% 6.1% 0.7%

Total Vacancy (SF) 368,323 169,568 537,891 62,910

Direct Vacancy (SF) 354,894 161,577 516,471 -

Sublet Vacancy (SF) 13,429 7,991 21,420 -

5%

4%

3%

2%

1%

0.7%

$15

$14

$13

$12

$11

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 0.7%

Industrial Available Space (SF) - - - 62,910

Avg. Asking Net Rent (PSF) $24.10 $21.91 $23.00 $15.61

Net Absorption (SF) -8,834 20,473 11,639 31,517

Net Absorption (SF) - YTD -8,834 20,473 11,639 31,517

New Supply (SF) 0 0 0 3,600

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$10

New Supply (SF) – YTD 0 0 0 3,600

Under Construction (SF) 16,500 154,455 170,955 100,000

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Vancouver Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

7%

$30

6.0%

6%

$29

5%

$28

4%

$27

3%

$25.86

2%

$26

1%

$25

0%

$24

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

Avg. Asking Net Rent (PSF)

Key Findings

• Average office asking net rents decreased by approximately 1% in Q1 2021, but for

the most part, landlords are holding asking rents steady while conceding on TI

allowances, free rent periods and shorter lease terms. Vacancy continues to rise

with downtown seeing the most space come to market this quarter. However,

availability rates decreased 40 bps QoQ to 6.6% this quarter. Due to the COVID-19

pandemic, the Vancouver office market saw a steady increase in sublease space

available throughout 2020. With the vaccine rolling out, Q1 2021 was the first

quarter that saw a slight decrease in the amount of available sublet space.

• There is continued upward pressure on industrial sale prices and rents given the

lack of supply and developable industrial land, combined with strong demand

across all size segments. There is no significant relief in the near term with most

new supply scheduled to deliver in 2022 or beyond.

• Although interest rates have increased, they remain low. The optimism regarding a

fast economic rebound are on the rise, and as a result, strata sales has gained

momentum. Projects being pre-sold prior to completion is returning as the norm,

with a significant portion of new developments being strata projects, given the

greater return of this development type and subsequently the ability to pay more

for land.

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

3%

$16

Vacancy Rate 6.2% 5.9% 6.0% 1.0%

Total Vacancy (SF) 1,976,454 2,394,645 4,371,099 2,115,164

Direct Vacancy (SF) 1,111,957 1,676,084 2,788,041 1,771,190

Sublet Vacancy (SF) 864,497 718,561 1,583,058 343,974

2%

1%

$14.09

1.0%

$14

$12

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 3.5%

Industrial Available Space (SF) - - - 7,549,799

Avg. Asking Net Rent (PSF) $32.26 $21.82 $25.86 $14.09

Net Absorption (SF) -329,950 -293,069 -623,019 1,308,681

Net Absorption (SF) - YTD -329,950 -293,069 -623,019 1,308,681

New Supply (SF) 41,466 181,000 222,466 838,284

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$10

New Supply (SF) – YTD 41,466 181,000 222,466 838,284

Under Construction (SF) 3,978,353 1,884,348 5,862,701 3,809,416

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Edmonton Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

Key Findings

• Edmonton's office market started 2021 the same way it ended 2020, with negative

absorption and a jump in vacancy (up to 18.7% from 18.0% in Q4 2020). Large

sublet offerings continued to come on the market, including the entire 54,000 SF,

Go Auto building. Some large headlease spaces were also added in Q1 2021, such

as 62,000 SF in the Former Service Alberta Building. While sublet space continued to

increase, the vaccine roll out is expected to bring employees back to the office, and

some of these sublets will be taken off the market, at least in part, if not entirely.

20%

19%

18%

17%

16%

15%

14%

18.7%

$18.54

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$20

$19

$18

$17

$16

$15

$14

Avg. Asking Net Rent (PSF)

• Despite negative absorption this quarter, there was some positive tenant activity,

with BDO taking 33,000 SF in 103 Street Centre, leaving the Southside and Bitcoin

Well taking 34,000 SF at Cecil Place.

• Industrial vacancy declined across Edmonton, with sublease availability down 10

bps QoQ to 0.5%, as multiple large warehouse spaces were leased in Q1 2021.

Industrial rents and operating costs increased across the city, with the exception of

the Southeast, Leduc / Nisku, St. Albert and Sherwood Park areas, which continued

to experience high vacancy, resulting in competitive pricing. Although no new

supply was delivered in the quarter, there was 301,700 SF of new construction

announced in Q1 2021, bringing construction activity to around 1.2 million SF.

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

12%

$12

Vacancy Rate 17.0% 21.3% 18.7% 7.0%

Total Vacancy (SF) 3,132,802 2,494,283 5,627,085 10,923,918

Direct Vacancy (SF) 2,650,672 2,152,913 4,803,585 10,152,550

Sublet Vacancy (SF) 482,130 341,370 823,500 771,368

11%

10%

9%

8%

7%

$9.52

7.0%

$11

$10

$9

$8

$7

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 9.2%

Industrial Available Space (SF) - - - 14,507,324

Avg. Asking Net Rent (PSF) $20.37 $17.62 $18.54 $9.52

Net Absorption (SF) 18,181 -257,035 -238,854 1,074,084

Net Absorption (SF) - YTD 18,181 -257,035 -238,854 1,074,084

New Supply (SF) 0 0 0 0

6%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$6

New Supply (SF) – YTD 0 0 0 0

Under Construction (SF) 0 0 0 1,192,199

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Calgary Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

30%

$16

Key Findings

• Although office leasing activity increased in Q1 2021, most deals resulted in

reduced tenant footprints. Q1 2021 lease transactions were either inevitable

due to upcoming expirations the opportunity to capitalize on low rents and

greater incentives.

• Significant M&A activity as well as overall compression in the energy sector has

resulted in several large blocks of space coming back to market this quarter.

Tenants continue to prefer shorter-term deals and extensions, aiming to get

through the next year before making any major future space decisions.

28%

26%

24%

22%

20%

27.8%

$13.16

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$15

$14

$13

$12

$11

$10

Avg. Asking Net Rent (PSF)

• Strong demand from logistics and distribution users contributed to strong

industrial leasing and sales activity, with Q1 2021 absorption on par with levels

experienced in 2020. This, along with a lack of new supply, drove vacancy

down, and we anticipate developers to break ground on new speculative

projects this year.

• Calgary remains well-positioned to attract larger users, driven by pent-up

demand in the large-bay segment and we anticipate continued interest in the

Balzac market as space begins to get leased within the city limits.

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

8%

$12

Vacancy Rate 31.2% 22.5% 27.8% 5.4%

Total Vacancy (SF) 13,760,196 6,398,938 20,159,134 8,404,156

Direct Vacancy (SF) 10,269,702 5,043,756 15,313,458 7,672,593

Sublet Vacancy (SF) 3,490,494 1,355,182 4,845,676 731,563

7%

6%

5%

4%

3%

5.4%

$9.38

$11

$10

$9

$8

$7

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 10.5%

Industrial Available Space (SF) - - - 16,029,047

Avg. Asking Net Rent (PSF) $10.75 $16.01 $13.16 $9.38

Net Absorption (SF) -1,315,480 -198,886 -1,514,366 1,400,000

Net Absorption (SF) - YTD -1,315,480 -198,886 -1,514,366 1,400,000

New Supply (SF) 0 88,000 88,000 102,440

2%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$6

New Supply (SF) – YTD 0 88,000 88,000 102,440

Under Construction (SF) 0 997,542 997,542 2,113,634

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Regina Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

16%

$20

Key Findings

• The Regina office market remains in a ‘wait and see’ state as tenants

continue to prefer shorter-term deals and extensions, aiming to get through

the next year before making any major future space decisions.

• Although vacancy rates moved down across the city in Q1 2021, expect

vacancy to rise this year as tenants try to determine how work-from-home is

going to impact their future decisions on a square foot per employee basis,

as the need to space people out more is balanced out with increased workfrom-home.

14%

12%

13.5%

$16.80

$18

$16

Avg. Asking Net Rent (PSF)

• Regina is a diversified and quick-to-recover resource-based economy, and

the local industrial market is well-positioned and well-supplied along a brand

new major logistics network.

• As vacancy rates fall, expect asking net rental rates, which are competitive, to

rebound. This dynamic is creating opportunities for both developers and

users looking to buy smaller product.

10%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$14

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

10%

$11

Vacancy Rate 14.2% 11.2% 13.5% 4.2%

Total Vacancy (SF) 126,074 605,049 731,123 791,674

Direct Vacancy (SF) -33,954 584,194 550,240 752,774

Sublet Vacancy (SF) 160,028 20,855 180,883 38,900

8%

6%

$10.27

4.2%

$10

$9

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - -

Industrial Available Space (SF) - - - -

Avg. Asking Net Rent (PSF) $16.55 $22.51 $16.80 $10.27

Net Absorption (SF) 18,478 12,164 30,642 194,993

Net Absorption (SF) - YTD 18,478 12,164 30,642 194,993

New Supply (SF) 0 0 0 56,970

4%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$8

New Supply (SF) – YTD 0 0 0 56,970

Under Construction (SF) 0 0 0 36,475

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Winnipeg Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

14%

$18

12.9%

13%

$17

12%

$16

11%

$15

$14.20

Avg. Asking Net Rent (PSF)

Key Findings

• Winnipeg’s office market continues to see tenants flock to new or

renovated buildings. This flight to quality shows that tenants value leasehold

improvements and quality workspace for their employees, which is even more

important now as a result of COVID-19. This has pushed Downtown Class C

vacancy up by 2.2% in Q1 2021.

• The relocation of SkipTheDishes from a Class C to a Class AA building is a

perfect example of this flight to quality. At the same time, it has increased

Class C vacancy and is also the outlier driving average asking rental rates

down from $16.81 PSF last quarter to $14.20 PSF in Q1 2021.

• The Winnipeg industrial market started 2021 with the same momentum seen

in Q4 2020. Demand for warehouse space continues despite the pandemic,

as a result of Winnipeg’s diverse economic base.

• Low vacancy, stable rental rates and strong demand mean that developers

continue to work to deliver modern industrial facilities to meet the needs

of the market.

10%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$14

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

6%

$12

Vacancy Rate 13.7% 11.0% 12.9% 3.7%

Total Vacancy (SF) 1,660,513 503,745 2,164,258 3,042,246

Direct Vacancy (SF) 1,584,263 480,921 2,065,184 2,925,753

Sublet Vacancy (SF) 93,437 15,540 108,977 116,493

5%

4%

3%

2%

1%

3.7%

$7.70

$11

$10

$9

$8

$7

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - -

Industrial Available Space (SF) - - - -

Avg. Asking Net Rent (PSF) $13.79 $15.70 $14.20 $7.70

Net Absorption (SF) 33,445 -47,812 -14,367 133,663

Net Absorption (SF) - YTD 33,445 -47,812 -14,367 133,663

New Supply (SF) 0 140,000 140,000 12,000

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$6

New Supply (SF) – YTD 0 140,000 140,000 12,000

Under Construction (SF) 0 53,750 53,750 287,490

Canada

Victoria Vancouver Edmonton Calgary Regina

Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Waterloo Market

Key Findings

• High levels of vacancy continue to impact the Kitchener / Waterloo Region’s

office market, with vacancy up 220 bps YoY and 40 bps QoQ to 15.7% in Q1

2021. The vacancy is even higher in the Downtown market, which ended Q1

2021 at 19.5%.

Office Fundamentals

Vacancy Rate Average Asking Net Rent

17%

16%

15%

14%

13%

12%

11%

15.7%

$14.91

$19

$18

$17

$16

$15

$14

$13

Avg. Asking Net Rent (PSF)

• Although many businesses are hopeful to return to the office later this year,

sublet space continues to increase in the suburbs, while Downtown sublet

space is down due to some sublets reverting to direct listings with landlords.

• Industrial vacancy in the region continues to drop, ending Q1 2021 at 2.3%,

its lowest point since Q4 2018. Despite rents falling by $0.10 PSF QoQ to

$6.79 PSF in Q1 2021, average TMIs increased by 2.2% over the same period.

• A lack of supply and increased demand, particularly for buildings in the

10,000 SF to 15,000 SF range are driving up renewal rates. Industrial land is

scarce, particularly in the cities, driving up land values and prompting

developers to pursue opportunities in the surrounding township markets.

10%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$12

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

6%

$8

Vacancy Rate 19.5% 13.6% 15.7% 2.3%

Total Vacancy (SF) 1,054,310 1,146,954 2,201,264 1,495,335

Direct Vacancy (SF) 949,454 865,235 1,814,689 1,283,646

Sublet Vacancy (SF) 104,855 281,719 386,574 211,689

4%

2%

$6.79

2.3%

$7

$6

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 2.7%

Industrial Available Space (SF) - - - 1,571,377

Avg. Asking Net Rent (PSF) $15.19 $14.67 $14.91 $6.79

Net Absorption (SF) -62,453 -41,004 -103,457 118,145

Net Absorption (SF) - YTD -62,453 -41,004 -103,457 118,145

New Supply (SF) 0 0 0 0

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$5

New Supply (SF) – YTD 0 0 0 0

Under Construction (SF) 469,659 43,552 513,211 275,222

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Toronto Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

8%

7.2%

$24

Key Findings

• Lockdown measures in Q1 2021 have posed challenges for GTA office tenants and

landlords alike, leading to delays in construction, permits, and the willingness to

make office leasing commitments. Tenants with lease expiries looming continue

to put off decisions, seeking shorter lease terms on renewals or relocations to

mitigate the uncertainty related to work-from-home vs. the return to the office.

• Many office subleases have come both on and off market in Q1 2021, and as we

get closer to the return to the office, some sublets could be removed from the

market in H2 2021, although only limited examples of this have occurred to date.

6%

4%

2%

$21.83

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$23

$22

$21

$20

$19

Avg. Asking Net Rent (PSF)

• Strong fundamentals persist for the GTA industrial market with both vacancy and

availability rates at their lowest levels since Q1 2020. There was over 3 million SF

of net absorption in Q1 2021, the highest amount since Q4 2019, and average

asking net rents increased by $0.36 PSF QoQ.

• E-commerce and distribution tenants continue to drive demand and highlights

the importance of return logistics, Cadillac Fairview announced a partnership with

ReturnBear in an effort to provide a one-stop return depot and improve product

returns across Canada.

Statistics

Central*

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

3%

$12

Vacancy Rate 4.8% 9.3% 7.2% 0.5%

Total Vacancy (SF) 5,581,543 12,423,844 18,005,387 3,944,558

Direct Vacancy (SF) 3,189,703 10,314,616 13,504,319 3,587,631

Sublet Vacancy (SF) 2,391,840 2,109,228 4,501,068 356,927

2%

1%

$10.54

0.5%

$10

$8

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 1.3%

Industrial Available Space (SF) - - - 10,580,843

Avg. Asking Net Rent (PSF) $27.45 $16.35 $21.83 $10.54

Net Absorption (SF) -847,180 -1,171,947 -2,019,127 3,007,965

Net Absorption (SF) - YTD -847,180 -1,171,947 -2,019,127 3,007,965

New Supply (SF) 0 266,242 266,242 2,356,121

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$6

New Supply (SF) – YTD 0 266,242 266,242 2,356,121

Under Construction (SF) 8,338,588 613,831 8,952,419 13,867,173

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Ottawa Market

Office Fundamentals

Vacancy Rate Average Asking Net Rent

10%

9.4%

$20

Key Findings

• Ottawa office vacancy rates continued to climb in Q1 2021, up 70 bps QoQ and 310

bps YoY to 9.4%, with office availability rates up 90 bps and 270 bps, respectively, to

11.3%. A big part of the issue continues to be sublet space coming to the market,

with Downtown sublease space up 50% QoQ, due to a large increase in Class B

space which previously had virtually no sublease space available.

• Despite this, average office asking net rents are relatively stable, albeit down YoY.

Many landlords still prefer to negotiate on TIs and terms instead, and this will likely

not change until the currently marketed sublet space reverts back to landlords.

9%

8%

7%

6%

5%

$16.74

$19

$18

$17

$16

$15

Avg. Asking Net Rent (PSF)

• The Ottawa industrial market, like many industrial markets across the country,

continues to see strong demand from e-commerce and distribution players. As

such, Ottawa’s industrial vacancy and availability rates are falling again, with

availability in the East falling between 0.5% and 1.2%.

• Development activity is picking up, with Avenue31 in the East and other projects

near Amazon Barrhaven. Rents are on the rise, which is allowing many developers

to take on new projects.

4%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$14

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

6%

$11.30

$12

Vacancy Rate 8.9% 9.8% 9.4% 1.7%

Total Vacancy (SF) 1,508,505 2,224,061 3,732,566 816,594

Direct Vacancy (SF) 1,191,814 2,019,229 3,211,043 666,824

Sublet Vacancy (SF) 338,691 204,832 543,523 149,770

5%

4%

3%

2%

1%

1.7%

$11

$10

$9

$8

$7

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 2.3%

Industrial Available Space (SF) - - - 1,085,173

Avg. Asking Net Rent (PSF) $20.03 $14.91 $16.74 $11.30

Net Absorption (SF) -163,491 -110,802 -274,293 274,315

Net Absorption (SF) - YTD -163,491 -110,802 -274,293 274,315

New Supply (SF) 0 0 0 20,000

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$6

New Supply (SF) – YTD 0 0 0 20,000

Under Construction (SF) 0 618,518 618,518 2,908,940

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Montréal Market

Key Findings

• Q1 2021 brought both renewed lockdowns as well as the vaccine rollout.

It has saw a continued increase in office sublet listings as some significant spaces

came to market in the Downtown Core and Center East, with media,

entertainment and advertising companies contributing to this increase.

Office Fundamentals

Vacancy Rate Average Asking Net Rent

13%

11.7%

12%

11%

$17.60

10%

9%

8%

7%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$20

$19

$18

$17

$16

$15

$14

Avg. Asking Net Rent (PSF)

• Despite a lack of office demand, the new supply pipeline has not slowed. Two of

the city’s most iconic retail buildings are being retrofitted with new office space:

the Holt Renfrew building renovations will include 85,000 SF of office space, and

the construction of a 25-storey office tower atop the Bay store at 585 Ste-

Catherine W.

• Montreal’s industrial market has not slowed down throughout the pandemic.

Strong demand in Q1 2021, particularly from e-commerce tenants, combined

with a lack of space, has led to rents reaching a new all-time high and a surge in

industrial land acquisitions, specifically off island in the North and South Shore.

• RoseFellow recently acquired a 1.1 million SF site in the West Island with zoning

allowing for 650,000 SF at 100 feet high, opening the discussion for Quebec’s

first new multi-storey industrial building.

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

6%

$10

Vacancy Rate 9.6% 14.3% 11.7% 1.4%

Total Vacancy (SF) 5,249,622 6,172,792 11,422,414 4,959,881

Direct Vacancy (SF) 4,408,952 5,059,213 9,468,165 4,643,176

Sublet Vacancy (SF) 840,670 1,113,579 1,954,249 413,252

4%

2%

$7.98

1.4%

$8

$6

Avg. Asking Net Rent (PSF)

Industrial Availability Rate - - - 2.1%

Industrial Available Space (SF) - - - 7,371,104

Avg. Asking Net Rent (PSF) $19.97 $15.21 $17.60 $7.98

Net Absorption (SF) -439,165 -540,027 -979,192 549,555

Net Absorption (SF) - YTD -439,165 -540,027 -979,192 549,555

New Supply (SF) 0 0 0 0

0%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$4

New Supply (SF) – YTD 0 0 0 0

Under Construction (SF) 1,464,361 1,582,438 3,046,799 2,232,978

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


Vacancy Rate

Vacancy Rate

Q1 2021

Halifax Market

Key Findings

• Despite the Maritime bubble, Halifax continued to feel the effects of the

pandemic, with office vacancies rising and many organizations continued

working from home. Several multi-floor office tenants (predominately in the

digital and tech sector) are offering their space on the sublet market.

Office Fundamentals

Vacancy Rate Average Asking Net Rent

16%

15%

14%

13%

12%

11%

14.8%

$16.05

$18

$17

$16

$15

$14

$13

Avg. Asking Net Rent (PSF)

• Although work from home is less prevalent in the Maritimes than in the rest of

Canada, there are discussions by the provincial government to shift some civil

services to work from home, a move that may influence future office demand.

• A push by developers, REITs and other players for co-working / shared office

projects to accommodate smaller, flexible office needs are coming down the

pipeline across both the CBD and suburbs.

• The Halifax industrial market continues to demonstrate strength. Demand is

unabated, and there is not enough supply, resulting in vacancy dropping

further. With warehousing and freight booming, shipping companies are eating

up industrial space, resulting in waiting lists for space.

10%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$12

Statistics

Downtown

Office

QoQ

Suburban

Office

QoQ

Total

Office

QoQ

Total

Industrial

QoQ

Industrial Fundamentals

Vacancy Rate Average Asking Net Rent

12%

$8.41

11%

10%

9%

8%

7%

6%

4.9%

5%

4%

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021

$9

$9

$8

$8

$7

$7

$6

$6

$5

Avg. Asking Net Rent (PSF)

Vacancy Rate 20.5% 11.0% 14.8% 4.9%

Total Vacancy (SF) 1,078,314 862,879 1,941,193 409,613

Direct Vacancy (SF) 1,053,409 820,044 1,873,453 397,254

Sublet Vacancy (SF) 24,905 42,835 67,740 12,359

Industrial Availability Rate - - - -

Industrial Available Space (SF) - - - -

Avg. Asking Net Rent (PSF) $16.54 $14.29 $16.05 $8.41

Net Absorption (SF) -115,203 20,330 -94,873 226,304

Net Absorption (SF) - YTD -115,203 20,330 -94,873 226,304

New Supply (SF) 0 0 0 0

New Supply (SF) – YTD 0 0 0 0

Under Construction (SF) 0 100,000 100,000 0

Canada

Victoria Vancouver Edmonton Calgary Regina Winnipeg Waterloo Toronto Ottawa Montréal

Halifax


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