As summer progressed and health restrictions eased across most of Canada, optimism for a post labour day return to office increased. However, as Q3 2021 drew to a close and COVID case counts increased, many companies pushed back their return to office plans, with some delaying their plans to Q1 2022.
- Sublet space decreased in many markets quarter-over-quarter, with this drop being evenly split between downtown and suburban submarkets. This can be attributed to many tenants taking back space in anticipation of needing it when they do return to the office, as well as sublet space reverting back to the landlord as direct space.
- The industrial market continues to experience strong demand across the country, with distribution, logistics and warehouse space being quickly leased by e-commerce, warehousing, manufacturing and other users.
- Despite the 31.5 million square feet currently under construction, developers remain unable to meet demand. As such, vacancy rates are expected to remain low, rent growth strong, and land prices on the rise for years to come.