Toronto Real Estate Board President Larry Cerqua announced that the total amount of leased space reported through TREB’s MLS® System in the third quarter of 2016 was up substantially on a year-over-year basis. There was a combined 6,592,818 square feet of industrial, commercial/retail and office space leased – up 34.8 per cent compared to the third quarter of 2015. It is important to note that the Q3 2015 results did represent a substantial dip compared to the same period in 2014.
More than three quarters of total space leased in Q3 2016 was in the industrial market segment. The average industrial lease rate on a per square foot net basis, for transactions with pricing disclosed, was up by 8.8 per cent to $5.80 compared to $5.33 in Q3 2015. The average commercial lease rate was down on a year-over-year basis, while the office lease rate was up compared to last year.
“The Canadian economy over the last year has been marked by regional differences. The Greater Toronto Area has benefited from a diverse economic base and, as a result, the regional economy has been relatively strong with the unemployment rate generally trending lower. This may be why we experienced an uptick in leasing activity. However, there remains some uncertainty in the economic outlook, especially as it relates to exports, and this could impact commercial leasing and sales activity moving forward,” said Mr. Cerqua.
The number of combined industrial, commercial/retail and office property transactions was down in Q3 2016 compared to a year earlier, with 216 properties changing hands versus 327 properties in Q3 2015.
While the number of sales were down year-over-year, average selling prices on a per square foot basis, for transactions where pricing was disclosed, proved resilient. Average selling prices were up for all three major market segments. The large increase in the office property average price was largely due to a shift in the size and location of properties sold this year compared to last, with some larger properties changing hands in Toronto’s central core.