Stepping into his role as President of the Toronto Real Estate Board, Paul Etherington announced a year-over-year increase in combined industrial, commercial/retail and office space leased through the TorontoMLS system in the second quarter of 2014.
There was over 5.8 million square feet of total space leased in Q2 2014 – up by 15.6 per cent compared to Q2 2013. At over 4.2 million square feet, the amount of industrial space leased was up by 10.8 per cent year-over-year. The industrial segment accounted for almost three quarters of total leased space.
Annual change in average lease rates was mixed. The average industrial lease rate, for properties leased on a per square foot net basis for which pricing was disclosed, was $5.10 – up by 5.5 per cent in comparison to Q2 2013. The average commercial lease rate was down by 2.4 per cent to $18.96 per square foot net. The average office lease rate was essentially unchanged compared to the same time frame last year.
“The industrial leasing market can be considered an indicator of business confidence. A lot of industrial activity in the Greater Toronto Area is pointed at the production of goods for export abroad and particularly south of the border to the United States. If we continue to see an uptick in industrial leasing, this could suggest that an increasing number of businesses are preparing for an upturn in export orders. However, it is important to point out that there still exists some uncertainty with regard to the value of the Canadian Dollar, so we could still experience some volatility in leasing activity moving forward,” said Toronto Real Estate Board President Paul Etherington.
There was a total of 239 industrial, commercial/retail and office properties sold through the TorontoMLS system in the second quarter of 2014. This result was down from 342 transactions reported in Q2 2013. Most of the decline was in the industrial market segment. The average selling price on a per square foot basis for transactions where pricing was disclosed was up for industrial properties. Average selling prices were down for commercial/retail properties and office properties.
“Changes in average selling prices were the result of both market forces and a different mix of properties sold, in terms of type, size and geography, this year compared to last. Business investment in Canada has been slow to recover since the recession. However, if we see a sustained recovery in the export sector, investment in industrial, commercial/retail and office properties will likely increase,” continued Mr. Etherington.
July 2014: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS
Leased Square Feet
Average Lease Rate
July 2014: Commercial Sales Completed with Pricing Disclosed on TorontoMLS
Sales (Price Disclosed)
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)
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