TORONTO — A new report says Canada’s commercial real estate sector is seeing strong demand for downtown office space alongside shrinking industrial supply.
Colliers Canada’s recently released second-quarter market outlook says the national office vacancy rate fell for the fourth consecutive quarter to 13.4 per cent, while industrial vacancies tightened for the second straight quarter to 3.3 per cent.
Colliers says these trends suggest the commercial real estate market is undergoing a “steady and measured” recovery driven by occupier demand, improving absorption levels and an increasingly constrained development pipeline.
Downtown office space is driving the boost in demand, as the report says tenants are prioritizing high-quality buildings that have amenities and are connected to transit.
Adam Jacobs, head of research at Colliers Canada, says companies are recognizing that physical hubs “are essential for collaboration,” helping to debunk predictions that AI and hybrid work models would replace office jobs.
While uptake continues to improve, new office construction has fallen to a 15-year low, with only 37,500 square feet of new supply delivered nationally in the second quarter.
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