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Canada Office Figures Q3 2022

October 3, 2022

2.1 million sq. ft. of positive net absorption was recorded this quarter, though much of this was attributable to the delivery of pre-leased new supply. If excluding the gains from new supply, national net absorption would have still remained positive, totalling to 207,000 sq. ft.
Aligned with the four-quarter average of 14.5 million sq. ft., the recovery of national sublet space has plateaued.
Overall, minor recovery was noted over the quarter as vacancy decreased 10 bps to 16.4%, a first since the onset of the pandemic. This was led by further improvement in the suburbs as downtown markets remained stable at 16.9% vacant.
As downtown tenants prioritize quality over cost, the national vacancy rate of Downtown Class B office towers is nearly 50% higher than that of their Downtown Class A peers.
Office construction levels have lowered to 12.7 million sq. ft. with major project deliveries coming to market in downtown Toronto, and suburban Montreal and Halifax this quarter.