Strong economy helps GTA commercial sector jump
The third quarter of 2018 was a good one for the commercial real estate sector in the GTA.
Members of the Toronto Real Estate Board’s Commercial Network reported that almost 7 million square feet of combined industrial, commercial/retail, and office space was leased through TREB’s MLS system in the period.
That’s a 24.9% increase compared to the same quarter of 2017.
Industrial space accounted for 75% of the space leased in Q3 2018.
"The regional economy in the Greater Toronto Area continues to be strong, as indicated by very low unemployment. This suggests that businesses are continuing to expand and/or relocate to the GTA to take advantage of a large and diverse talent pool with experience across many different industries, including the tech sector, financial and professional services, construction and manufacturing," said TREB president Garry Bhaura.
For the space leased where pricing was disclosed, the average industrial lease rate was up 11.3% to $7.80 in Q3 2018, the average office lease rate was up 8.2% to $15.20. There was also a substantial gain for the average commercial/retail lease rate – 65.9% - largely due to several higher end lease transactions reported in the City of Toronto.
Sales were down to 189 from 270 a year earlier with prices flat for industrial, down for offices, and up substantially for commercial/retail due to some very high-value transactions.
North American hub
Mr Bhaura believes the Greater Toronto Area is well-positioned to by a North American hub for trade, innovation, and economic development.
"We have recently seen a number of technology companies commit to investments totaling over one billion dollars in our region. On top of the tech sector, the GTA also continues to be a leader in other key sectors, including finance, professional services, construction, and manufacturing. This is obviously important as it relates to the future demand for commercial space," he said.
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