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Leased commercial space in Toronto declines from 2011, finds TREB

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by Daily Commercial News

There was 246,274 square feet of leased commercial space through the TorontoMLS system in August 2012, a 54 per cent decline compared to the previous year, reports the Toronto Real Estate Board (TREB) Commercial Division Members.

A 54 per cent decline compared to August 2011

TORONTO

There was 246,274 square feet of leased commercial space through the TorontoMLS system in August 2012, a 54 per cent decline compared to the previous year, reports the Toronto Real Estate Board (TREB) Commercial Division Members.

“Recent economic news pointed to pluses and minuses for the commercial real estate market in the Greater Toronto Area. Business investment was a driver of GDP growth in the second quarter, but at the same time growth in exports reached a four quarter low,” said TREB commercial division chair Cynthia Lai in a statement.

“These mixed results point to uncertainty about future economic growth, which helps explain why some industrial firms in the GTA have remained on the sidelines with regard to real estate investment.”

The industrial segment of the market continued to account for the majority of leased space, 61 per cent, with deals reported for 151,365 square feet.

The average lease rate was $5.74 per square foot net, up from $4.28 per square foot net reported in August 2011.

The average lease rate for commercial/retail properties was down 61.6 per cent from last year to $11.32 from $29.47.

TREB reports that this change was due to a large retail lease transaction; larger properties often lease for a smaller amount per square foot.

The number of commercial properties sold in August 2012 was similar to the total for the previous year, 59 this year versus 64 in 2011.

The annual change in the average selling price per square foot was mixed depending on the property type in question.

The average industrial selling price was up on a year-over-year basis whereas the average price for commercial/retail and office properties was down.

“Given the uncertain economic outlook businesses have faced this year, the fact that the number of transactions in August remained in line with last year’s total is a positive sign,” said Lai.

“It is also important to note that the types of deals differ from one period to the next, which goes a long way to explaining the average price differences between August 2012 and the same period last year.”

DCN NEWS SERVICES

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