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Booming Canadian cities face space crunch in 2006
4 Jan 2006
Most major cities in Canada are expected to experience strong demand for commercial space in 2006, according to a new report from commercial property agents Cushman & Wakefield.
In boomtown Calgary especially, the "no vacancy" sign could become a common sight, while vacancy will also reach new lows in Vancouver and Toronto.
Driven by an insatiable demand for space from companies tied to the oil and gas sector, Calgary's office towers are already busting at the seams - with little relief in sight.
With the city's central area office vacancy expected to bottom-out at 1.8 per cent in 2006, businesses will be challenged to meet their space needs until new supply eases the situation.
"2006 is going to be the tightest market we've seen in over 20 years," said Chris Anderson of Cushman & Wakefield.
"We're going to see more people in less space, hotelling is also an option, and demand for suburban space is going to climb.
"The good news is that we have a solid economic bedrock from which to build. Developers are feeling confident that new buildings can deliver long-term returns and we expect a number of new building announcements in 2006. By 2010, Calgary's skyline will have a completely different look."
According to Cushman & Wakefield, Vancouver is also sitting pretty for the coming year, thanks to an infrastructure boom related in part to the 2010 Olympics and increased resource sector activity.
With central area vacancy projected to fall to 6.7 per cent in 2006 and with little new space coming on stream until 2007, the Class A office market will see continued pressure on rental rates, which should spur development announcements in this market as well.
In Canada's largest office market, Toronto, demand for space will remain strong through 2006, pushing the vacancy rate in the central area down to 7.6 per cent from 8.9 per cent in the third quarter of 2005.
As for other Canadian markets, the report found that Edmonton, Winnipeg, Ottawa and Montreal are also geared for vacancy decreases in 2006.
4 Jan 2006
Most major cities in Canada are expected to experience strong demand for commercial space in 2006, according to a new report from commercial property agents Cushman & Wakefield.
In boomtown Calgary especially, the "no vacancy" sign could become a common sight, while vacancy will also reach new lows in Vancouver and Toronto.
Driven by an insatiable demand for space from companies tied to the oil and gas sector, Calgary's office towers are already busting at the seams - with little relief in sight.
With the city's central area office vacancy expected to bottom-out at 1.8 per cent in 2006, businesses will be challenged to meet their space needs until new supply eases the situation.
"2006 is going to be the tightest market we've seen in over 20 years," said Chris Anderson of Cushman & Wakefield.
"We're going to see more people in less space, hotelling is also an option, and demand for suburban space is going to climb.
"The good news is that we have a solid economic bedrock from which to build. Developers are feeling confident that new buildings can deliver long-term returns and we expect a number of new building announcements in 2006. By 2010, Calgary's skyline will have a completely different look."
According to Cushman & Wakefield, Vancouver is also sitting pretty for the coming year, thanks to an infrastructure boom related in part to the 2010 Olympics and increased resource sector activity.
With central area vacancy projected to fall to 6.7 per cent in 2006 and with little new space coming on stream until 2007, the Class A office market will see continued pressure on rental rates, which should spur development announcements in this market as well.
In Canada's largest office market, Toronto, demand for space will remain strong through 2006, pushing the vacancy rate in the central area down to 7.6 per cent from 8.9 per cent in the third quarter of 2005.
As for other Canadian markets, the report found that Edmonton, Winnipeg, Ottawa and Montreal are also geared for vacancy decreases in 2006.