Presently North America is experiencing a wave of new office construction with 146.5M square feet of premises under development. Of this, almost 20.8M square feet are located in Canada, with 89% being built in the three largest cities of Toronto, Montreal and Vancouver.
Construction of this magnitude would suggest new work premises for a forecast 976,000 new jobs in North America, with 138,000 (or 14%) of these located in Canada. In addition, Canada is building 87% more office premises than the United States relative to the size of the respective office market sizes. Reasons for Canada having a higher proportion of the overall construction compared to its overall population include:
- Canada benefiting from high growth in office based employment industries
- Canada’s substantially lower office vacancy rate is driving new office construction (only three United States cities have vacancy rates lower than the Canadian average of 9.2%)
- Canada’s more open immigration policies and societal multiculturalism are enabling employment and population growth
Overall, Canada’s three largest markets make up half of the top six markets in terms of new premises being added to the market, with Vancouver in first place adding 6.8%, Toronto in fifth place adding 4.2% and Montreal in sixth adding 3.6%.
Canada has a higher office density per census population than the United States, this combined with a lower average vacancy rate (9.2% compared to 11.6%) show that Canada has a well urbanized population of knowledge workers and will more easily absorb the new office buildings under construction. Without the capacity to allow employers to grow and new companies to enter the market the potential for growth in Canada would be muted; the new wave of office construction is further cementing Canada as a desirable location for new office employment growth.