According to the latest Commercial Realtors Report from the Toronto Real Estate Board, there were 639,878 square feet of combined office, industrial and commercial/retail space leased in May 2014, compared to 436,433 square feet leased in May of last year, or an increase of 47 per cent.
“Despite slower than expected economic growth to start 2014, we experienced a considerable uptick in the amount of space leased,” said Toronto Real Estate Board Commercial Committee Chair Cynthia Lai. “The consensus view is that the slow first quarter GDP growth in Canada and south of the border was mainly due to extreme weather. The expectation is for an acceleration in US economic growth moving forward, which should have a positive effect on the Canadian economy, particularly where exports are concerned. Many GTA businesses arguably subscribe to this view and were taking on space in May in anticipation of stronger demand for their goods and services.”
For leased space, the average lease rate increased by 1.5 per cent year-over-year to $5.30 per square foot. There were 50 sales during the month of May, down by about 30 per cent compared to the same month last year.
Lai continued, “Looking forward, low borrowing costs coupled with the anticipated increase in the demand for Canadian exports should fuel commercial real estate purchases in the GTA. It will be important to watch second quarter economic data, especially as it relates to business confidence and willingness to invest in the second half of 2014.