Canadian cities are seeing a return to pre-downturn office vacancy levels quicker than their American counterparts, according to Avison Young.
This is according to its mid-year 2010 office market report released August 5, which found that improving job markets in both countries are supporting an increase in leasing and investment activity and business confidence.
While the U.S.’s vacancy rate stands near or just below 15% in major cities at mid-year 2010, Canada’s national office vacancy rate stands at 9.9%, up from 8.4% at mid-year 2009.
Vancouver (8.3%), Edmonton (9.4%), Lethbridge (9.2%), Regina (2.9%) and Winnipeg (4.9%) have office vacancy rates below the national average. Regina (2.9%) and Mississauga (13.2%) anchored the low and high ends of the range.
Vancouver’s downtown vacancy rate is up 0.01% to 5.1% compared with the national average of 8.2%.
Downtown class A asking rents are highest in Vancouver at $30 per square foot net and lowest in Quebec City at $10 per square foot net. The national average is $21 per square foot net.
Avison Young pushed its recovery forecast to 2011 as a result of its findings.
“All of our metrics and analyses conducted from the fourth quarter of 2009 to the first quarter of 2010 pointed to a potential recovery in the fourth quarter of 2010," said Mark Rose, Avison Young’s CEO. “However, the second quarter of 2010 witnessed continuing and new global disruptions as well as extreme economic uncertainty in the U.S. Hence, we will not hit our three current key metrics of employment growth, robust GDP growth or clear corporate decision-making.
"This does not mean that activity will grind to a halt. It just means that a true recovery cannot begin until the political and economic clouds in the U.S. begin to dissipate. The good news is that Canada continues to recover and has a relatively robust decision-making environment.”