Toronto Real Estate Board President Mark McLean announced that TREB Commercial Network Members reported year-over-year growth in total commercial leasing activity reported through TREB’s MLS® System for the first quarter of 2016.
Lease agreements were signed for a combined 6,381,533 square feet of industrial, commercial/retail and office space. This result represented a 6.9 per cent increase compared to the first quarter of 2015. The amount of space leased was up for all three major market segments. Industrial space accounted for approximately three-quarters of total leased space. The average industrial lease rate, for properties transacted on a per square foot net basis with pricing disclosed, was $4.93 – down from $5.40 in Q1 2015. The commercial/retail lease rate was also down from $19.30 in Q1 2015 to $19.08 in Q1 2016.
In contrast, the average office lease rate was up to $14.18 compared to $12.54 last year. It is important to note that year-over-year changes in average lease rates can result from shifts in market conditions and from changes in the mix of properties leased from one period to the next. “The uptick in the amount of commercial space leased in the first quarter is a promising sign and may follow along with the strong result for Canadian economic growth recently reported by Statistics Canada for January 2016. What was interesting from the most recent GDP release was the fact that goods producing sectors were key drivers of growth, which is obviously a good news story when it comes to industrial-focused properties,” said Mr. McLean.
The total number of combined industrial, commercial/retail and office property sales through TREB’s MLS® System amounted to 222 in the first quarter. This result was down from 287 sales reported during the same timeframe in 2015. Sales were down for both the industrial and commercial/retail market segments and up for the office segment.
Average selling prices on a per square foot basis for transactions with pricing disclosed held up well compared to last year. Industrial and commercial/retail pricing was up annually, while the sale price for office properties was down