According to the Toronto Real Estate Board’s Commercial Network Members, there was a 6.1 million square foot increase in leased office, commercial and industrial space during the fourth quarter of 2015 compared to the same time in 2014, a 19.6 per cent increase.
“It was a tumultuous time in Canada, from an economic perspective, in 2015,” said Mark McLean, president of the Toronto Real Estate Board. “Nationally, we entered into and then climbed back out of a modest recession. The volatility in economic growth obviously had its foundation in declining oil prices, which hit the economies of western provinces particularly hard. However, in other parts of the country, like Ontario and particularly the GTA, economic conditions were not so severe. The unemployment rate trended lower for much of 2015, suggesting that many firms in the GTA were taking on employees. This suggests that some companies may be anticipating stronger growth ahead, perhaps as a result of the lower valued Canadian dollar vis-à-vis the US.”
The number of sales of commercial, office, industrial spaces decreased by 27 per cent in the fourth quarter of 2015 compared to the same time in 2014, for a total of 235 sales.
Mr. McLean continued, “Looking forward, it is quite possible that we could see an uptick in commercial leasing and sale activity in 2016, as the economy in the GTA and Ontario more broadly outperforms many other Canadian provinces. With this said, it is important to point out that after a good GDP growth result for the third quarter of 2015, a poor October result suggests that the rate of economic growth may have moderated in the fourth quarter. The continuation of economic volatility could slow some firms’ real estate investment decisions.”