TORONTO, May 5th, 2015 – Toronto Real Estate Board President Paul Etherington announced that TREB Commercial Network Members reported a strong year-over-year increase in leasing activity through TREB’s MLS® system in April. Combined industrial, commercial/retail and office space leased on a per square foot net basis, with pricing disclosed, was up by 79 per cent in comparison to the same period last year. The industrial market segment led the way with almost double the amount of space leased this year compared to last. The increase in industrial leasing was driven by deals reported in larger size categories. These types of larger deals were absent in April 2014. The number of transactions and amount of space leased can be volatile, especially when considering monthly statistics.
Changes in average lease rates in April were mixed. The average industrial lease rate was down to $5.11 per square foot net compared to $5.37 last year. This dip was due to the increased share of larger properties leased this year. Larger properties tend to lease for less on a per square foot basis. Average commercial/retail lease rates were up to $21.32 per square foot net compared to $19.00 last year and average office lease rates were down slightly to $13.06 per square foot net.
“Following an increase in leasing in the first quarter, strong April leasing results relative to last year point to positive results for the second quarter as well. Even though there is still some uncertainty for the outlook for the Canadian economy as a whole, it seems probable that the lower value of the Canadian dollar will boost the production of exports produced in the GTA. This expectation may be leading firms to take on more space in order to boost production,” said Mr. Etherington.
Total commercial sales in April 2015, where pricing was disclosed, amounted to 56, compared to 53 in April 2014. Industrial and office transactions were up on a year-over-year basis, whereas commercial/retail sales were down. Average selling prices per square foot were up slightly for industrial and office properties. The large increase in the average commercial/retail selling price was compositional in nature, with a change in the mix of above-average price transactions in the central core.
“The GTA is often at the top of various rankings, both as a place to live and a place to do business. The region’s close proximity to the United States and the recent dip in the value of the Canadian dollar should underpin further investment in commercial real estate moving forward,” continued Mr. Etherington.