TORONTO, December 4, 2013 -- In November 2013, Toronto Real Estate Board Commercial Division Members reported an annual increase in leased square feet in industrial, commercial/retail and office properties. There was a total of 630,466 square feet of space leased on a per square foot net basis in November 2013 – up by approximately 23 per cent in comparison to 510,933 leased square feet in November 2012.
Approximately 80 per cent of leased space, or 506,918 square feet, was accounted for by the industrial segment of the market in November 2013. This share was down from 86 per cent in November 2012, suggesting that the mix of transactions became slightly more diverse this year compared to last.
Average lease rates on a per square foot net basis were flat to down compared to November 2012. Much of the change in the commercial/retail sector was due to year-over-year differences in the location and type of space leased, which is often the case when comparing monthly transactions from one year to the next.
“In the third quarter of 2013, the Canadian economy grew at its fastest pace since 2011. While the rate of growth was still less than we would like to see, this was still welcome news. The uptick in economic activity in the third quarter may have prompted some businesses to lease more space,” said TREB Commercial Division Chair Cynthia Lai.
Combined industrial, commercial/retail and office property sales were also up on a year-over-year basis in November 2013. Total November sales amounted to 64 this year versus 58 in 2012. The industrial and commercial/retail market segments each accounted for 25 and 26 transactions respectively. The remaining 13 deals were accounted for by the office segment.
Average selling prices were up considerably on a per square foot basis compared to November 2012. However, these increases, especially where the commercial/retail and office segments are concerned, can almost entirely be attributed to changes in the mix of properties sold in November 2013 compared to November 2012. Some relatively large commercial/retail and office properties changed hands in the City of Toronto last month at prices well-above the GTA norm.
“Looking forward, it appears that demand for commercial real estate in the GTA remains strong. This, coupled with the fact that interest rates are expected to remain somewhat flat over the next year, suggests that pricing for commercial real estate will be stable to up in 2014,” continued Ms. Lai.
November 2013: Per Square Foot Net Commercial Leasing Summary
Lease Transactions Completed on a Per Square Foot Net Basis with Pricing Disclosed on TorontoMLS*
Leased Square Feet
Average Lease Rate
Source: TREB Commercial Division
November 2013: Commercial Sales Completed with Pricing Disclosed on TorontoMLS*
Sales (Price Disclosed)
Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)