Canada's office vacancy rate falls to 13.4 per cent as downtown demand strengthens
Industrial vacancies also tighten to 3.3 per cent, marking the second consecutive quarter of contraction, according to Colliers Canada's market outlook.
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Canada's commercial real estate sector is showing signs of steady recovery, with national office vacancy falling for the fourth consecutive quarter to 13.4 per cent and industrial vacancies tightening for the second straight quarter to 3.3 per cent, according to Colliers Canada's second-quarter market outlook released Wednesday.
The trends suggest the commercial market is undergoing a "steady and measured" recovery driven by occupier demand, improving absorption levels, and an increasingly constrained development pipeline. Downtown office space is driving much of the boost, with tenants prioritizing high-quality buildings that have amenities and are connected to transit.
"Companies are recognizing that physical hubs are essential for collaboration," said Adam Jacobs, head of research at Colliers Canada, helping to debunk predictions that AI and hybrid work models would replace office jobs.
While uptake continues to improve, new office construction has fallen to a 15-year low, with only 37,500 square feet of new supply delivered nationally in the second quarter.
