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The Greater Toronto Hamilton Area (GTHA) continues to witness solid industrial/land indications. There is an uptick in availability and vacancy across the key office sub-markets, due to lock-down limitations remaining in place for the majority of the second quarter of 2021.
Industrial Market Outlook
The GTHA industrial market had a landmark quarter in Q2 2021. The total availability rate has dropped to a new low. Absorption in bigger blocks of space is accounted for by demand from the e-commerce and logistics industries, but demand for smaller blocks of space is still high. With more people working from home and spending less money, the home improvement sector has seen increased demand in small bay units.
Due to a dearth of available space in the GTHA, renters are looking for alternatives in the nearby tertiary markets. Following four consecutive quarters of rising net rentals, more landlords are beginning to offer adjustable rental rates, as each new transaction raises the bar.
Office Market Outlook
In contrast to last quarter’s significant negative absorption, positive net absorption of 47,851 square feet was recorded in the GTHA, owing mostly to tenants taking occupancy in the GTHA West and Downtown Toronto areas. This shift reflects a fresh sense of confidence, which is reflected in greater tour activity as government restrictions are removed and a growing percentage of the populace is vaccinated.
With continued changes in tenant and employee demands, it’s likely that landlords will hold off on lowering face rates in order to boost leasing activity, preferring instead to offer unique enticement packages in the future.
Read more in our Q1 2021 Market Report!
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