Over the past decade, Toronto’s tech industry has been driving change and solving problems.
The booming tech sector was part of the reason Toronto had the lowest office vacancy rate in North America before the pandemic took hold last year.
Even with our current elevated office vacancy, the city is a robust, diverse hub for the innovation economy, stoked largely by the local fintech, software development and consulting industries — and a variety of other tech businesses. As we peer deeper into 2021, the entrepreneurship, flexibility and natural innovative spirt of Toronto’s tech community will guide our market as we navigate continued uncertainties and discover new opportunities.
The past year has led companies in the tech sector to question what they will need to thrive in 2021 and beyond; there will be — and should be — some re-evaluations of things like productivity, culture and office space rightsizing.
Here are four things in Toronto’s tech space that we should be keeping an eye on this year.
Creative deal-making will be a must
It's important to develop new strategies for landlords and tenants to move forward together in deals that promote flexibility and mutual success.
The sublease market is growing, which means that there will be plenty of room for creative deal-making. Landlords and brokers will need to find new ways to lease tech spaces. That means landlords should start putting shorter or more variable lease options on the table to attract and keep fresh, new occupiers with bright ideas and ambitious business plans. Young tech companies will have more choice in the market, but will still be cautious as they navigate the uncertainty of market conditions.
No one has a crystal ball, but it’s clear that companies of all sizes are looking to make smart and nimble decisions with regards to all facets of their business – not just real estate.
From a tenant perspective, those who are open to shorter or more creative leases and subleases will have increased access to larger, “better” spaces in desirable locations than were previously available before the pandemic. That said, subleases come with a unique set of challenges and things to pay attention to — but that’s a topic for another day.
The evolving workplace will lead to shifts in spending
Tech culture in 2021 will continue to evolve as companies seek ways to establish their ideal balance for remote and office work. There seems to be a rising consensus that many Canadian companies will adopt a hybrid work culture, wherein working hours are split between home and the office — especially in tech.
It’s important for tech leaders to find ways to successfully manage hybrid working, and balance employee satisfaction with productivity. Doing so will help shape a strong culture to attract and retain top talent.
For some companies, landing at an ideal remote and office work balance could result in changes to how they spend money and invest in their business. For example, some groups could decrease their fixed real estate costs and expenditures on things like furniture and renovations, which would free up money to invest in tech and tools that boost collaboration and efficiency within their new work model.
There will be more emphasis on wellness
It’s no secret that everyone was focused on health pre-pandemic, and this will surely continue once the pandemic is over. We can expect a renewed emphasis on wellness to translate into new initiatives from employers in the tech work environment.
Employees need to feel comfortable at work, and companies must protect not only physical health but also mental health. Moving forward, cleaning and disinfecting protocols are non-negotiable additions to any workspace. However, we will also see increased amenities and health facilities in office buildings, and tenants will be taking this into account.
Landlords will have to ensure that they have a competitive advantage when it comes to making tenants feel safe and healthy. We can look to some landlords who are already leading in this aspect, including Oxford Properties, which has launched Level — an exclusive wellness club at the Richmond-Adelaide Centre.
New opportunities will emerge as the pandemic fades
2021 will be the year of new opportunities. As we keep an eye on Canada’s so-far sluggish vaccine rollout, the federal government continues to emphasize that every Canadian who wants to be vaccinated, will be vaccinated by the end of the year.
This directive could set up the economy for a big rebound as the pandemic fades, presenting opportunities for energetic and strategic entrepreneurs to break into Toronto’s tech scene. This also sets the stage for today’s leaders in Toronto’s tech sector to position themselves well to benefit from the emergence of new business opportunities, commercial partners and an expanded talent pool.