Toronto Real Estate Board President Larry Cerqua announced that TREB Commercial Network Members reported strong growth in commercial leasing activity in the second quarter of 2016. Combined industrial, commercial/retail and office space leased through TREB’s MLS® System amounted to 7,390,832 square feet. This result was up by a substantial 27 per cent compared to the result reported for the second quarter of 2015.
The amount of leased space was up on a year-over-year basis for industrial and office properties, but down for the commercial/retail segment. More than threequarters of space leased in Q2 was in the industrial market segment.
Average lease rates reported on a per square foot net basis for transactions where pricing was disclosed were up on an annual basis for industrial and office space to $5.53 and $15.25 respectively. The average lease rate for commercial/retail space was down to $17.62.
“It was certainly promising to see growth in the amount of space leased in the second quarter of the year, especially given the level of economic uncertainty in Canada at the present time. However, while the regional economy in the Greater Golden Horseshoe has outperformed relative to many other metropolitan areas across the country, it is important to note that the most recent Bank of Canada Business Outlook Survey points to flat sales growth and moderate investment intentions. This suggests that we could continue to see some volatility in commercial leasing in the coming months,” said Mr. Cerqua.
The total number of combined industrial, commercial/retail and office property sales reported through TREB’s MLS® System amounted to 238 in the second quarter. This result was down from 362 sales reported during the same timeframe in 2015. Sales were down for all major market segments.
Average selling prices on a per square foot basis for transactions with pricing disclosed were down annually for industrial and office properties, to $86.70 and $214.78 respectively in the second quarter. Over the same time period, the average commercial/retail selling price was up to $160.94. For both commercial leasing and sales, changes in average lease rates and sale prices result from fluctuations in market conditions and year-over-year variations in the mix of properties transacted, in terms of geography, size and type.