Canada is home to some of the biggest and most successful companies in the world, so naturally there is high demand for office space. Offices are also one of the asset classes that enjoys
. After taking a hit during the coronavirus (COVID-19) pandemic, the Canadian office sector has headed for recovery. In 2022,
in Canada is expected to reach almost 59 billion Canadian dollars, which is an improvement from 2020 but still much below 2019 levels.
After two difficult years, conditions in the Canadian office market are improving
Office vacancy rates increased for the second year in a row in 2021 as a result of the coronavirus (COVID-19) pandemic. The economic uncertainty during the beginning of the pandemic made many occupiers place their expansion plans or lease renewals on hold, but this situation has changed since and market fundamentals are slowly recovering. The Canadian
office space net asking rent per square foot also increased from the overall stable rate of 20 Canadian dollars in previous years to over 24 Canadian dollars in 2021. Demand for prime for office space remains strong and in 2021 there was about
six million square feet of new office space supplied in Canada.
Focus on Toronto and Vancouver
Toronto, the most populous city in Canada, has an abundance of major corporations such as Capital One, IBM, and Unilever to name a few. The
majority of the office space in the city is located in the suburbs. The vacancy rates in suburban office buildings are
significantly higher than the vacancy rates in the downtown office buildings, showing that the downtown offices are in higher demand. Unlike Toronto, Vancouver has
most of its office space located downtown. Although Vancouver is much less populous than Toronto, it is known for being a very dense city with a thriving downtown area. Perhaps unsurprisingly, the downtown office space in Vancouver is
much more expensive than the national average, at about 50 Canadian dollars per square foot.
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