TORONTO, June 4, 2014 – Toronto Real Estate Board Commercial Network Members
reported 639,878 square feet of combined industrial, commercial/retail and office space
leased through the TorontoMLS system in May 2014, on a per square foot net basis
where pricing was disclosed. This result was up from 436,433 square feet leased in
May 2013 and represented a 47 per cent increase on a year-over-year basis, which was
driven by all major market segments.
The industrial leasing market segment accounted for approximately 72 per cent of
space leased. The average lease rate for these transactions was up by 1.5 per cent to
$5.30 per square foot net. The commercial/retail and office segments experienced
stronger average rates of growth, but a lot of this growth was compositional in nature,
including a different mix of unit sizes and geography of transactions compared to May
“Despite slower than expected economic growth to start 2014, we experienced a
considerable uptick in the amount of space leased. The consensus view is that the slow
first quarter GDP growth in Canada and south of the border was mainly due to extreme
weather. The expectation is for an acceleration in US economic growth moving forward,
which should have a positive effect on the Canadian economy, particularly where
exports are concerned. Many GTA businesses arguably subscribe to this view and
were taking on space in May in anticipation of stronger demand for their goods and
services,” said Commercial Committee Chair Cynthia Lai.
There were 50 combined industrial, commercial/retail and office property sales reported
in May 2014 – down by approximately 30 per cent in comparison to May 2013. The
average selling price per square foot, for transactions where pricing was disclosed, was
up on a year-over-year basis for the industrial and commercial/retail segments of the
market and down for the office segment.
The key reason for the strong increases in the average industrial and commercial/retail
selling prices was the lack of deals for larger sized properties this year. Generally
speaking, larger properties sell for less on a per square foot basis compared to smaller
“Looking forward, low borrowing costs coupled with the anticipated increase in the
demand for Canadian exports should fuel commercial real estate purchases in the GTA.
It will be important to watch second quarter economic data, especially as it relates to
business confidence and willingness to invest in the second half of 2014.”
Source: Toronto Real Estate Board - Commercial Network Members