The impact of the pandemic has resulted in a higher vacancy rate of the office space that climbed to over 6% in Q4 2020. Right now, everyone is watching the sublease market as we are going to see more space being put up for sublease. The suburban office vacancy rose to 15.3%, a 17-year high with over 50% located in the financial core.
The question remains whether how much office space the companies will need in the future. Factors like the attitude towards work change and companies experiencing financial hardship are going to evaluate companies’ needs and put some of their excess space on the market. Still, for many businesses, the office is fundamentally important, and with new vaccines in circulation, the path for a safe return is becoming clearer.
Despite the current dynamics, the Canadian office market exhibited some of the better performances this year and has the lowest availability rate among all comparable markets in North America.
The Bank of Nova Scotia takes away the trophy for this year’s largest office leasing deal so far. It agreed to renew 560,000 square feet of office space in Toronto. But the deal will see 310,000 fewer square feet from owners KingSett Capital and Alberta Investment Management, leaving the top seven floors of a 68-storey tower to rent.
Regardless of the major work-from-home trends in 2020 and 2021, Jon Love, the founder and CEO of KingSett Capital said that the deal had been in the works for over a year and had nothing to do with COVID.
Other Top Office Leases Recognized for Greater Toronto
LCBO Tower, 100 Queens Quay East, Toronto, ON
Space Leased: 84,867 SF Deal Type: New Lease
Sign Date: November 1, 2020
Size: 675,000 SF
Tenant: Richardson Wealth
Centro Square, 7777 Weston Road, Vaughan, ON
Space Leased: 35,388 SF
Deal Type: Sublease
Sign Date: October 9, 2020
Size: 180,000 SF
Tenant: Sporting Life Group
Beardmore Building, 35-39 Front St. E, Toronto, ON
Space Leased: 26,324 SF
Deal Type: New Lease
Sign Date: November 19, 2020
Size: 48,475 SF
Tenant: Rose Rocket
Davisville Centre, 1910-1920 Yonge St., Toronto, ON
Space Leased: 25,687 SF
Deal Type: Renewal
Sign Date: October 30, 2020
Size: 203,000 SF
Tenant: Toronto Transit Commission
5150-5160 Yonge St., Toronto, ON
Space Leased: 25,000 SF
Deal Type: New Lease
Sign Date: November 16, 2020
Size: 552,257 SF
Tenant: Starbucks Coffee Canada
Source:
CoStar
Financial Post
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