NEWS RELEASE



Commercial REALTORS® REPORT LATEST COMMERCIAL MARKET FIGURES

TORONTO, June 4, 2014 -- Toronto Real Estate Board Commercial Network Members reported 639,878 square feet of combined industrial, commercial/retail and office space leased through the TorontoMLS system in May 2014, on a per square foot net basis where pricing was disclosed.  This result was up from 436,433 square feet leased in May 2013 and represented a 47 per cent increase on a year-over-year basis, which was driven by all major market segments. 

The industrial leasing market segment accounted for approximately 72 per cent of space leased.  The average lease rate for these transactions was up by 1.5 per cent to $5.30 per square foot net.  The commercial/retail and office segments experienced stronger average rates of growth, but a lot of this growth was compositional in nature, including a different mix of unit sizes and geography of transactions compared to May 2013. 

“Despite slower than expected economic growth to start 2014, we experienced a considerable uptick in the amount of space leased.  The consensus view is that the slow first quarter GDP growth in Canada and south of the border was mainly due to extreme weather.  The expectation is for an acceleration in US economic growth moving forward, which should have a positive effect on the Canadian economy, particularly where exports are concerned.  Many GTA businesses arguably subscribe to this view and were taking on space in May in anticipation of stronger demand for their goods and services,” said Commercial Committee Chair Cynthia Lai.  

There were 50 combined industrial, commercial/retail and office property sales reported in May 2014 – down by approximately 30 per cent in comparison to May 2013.  The average selling price per square foot, for transactions where pricing was disclosed, was up on a year-over-year basis for the industrial and commercial/retail segments of the market and down for the office segment. 

The key reason for the strong increases in the average industrial and commercial/retail selling prices was the lack of deals for larger sized properties this year.  Generally speaking, larger properties sell for less on a per square foot basis compared to smaller properties. 

“Looking forward, low borrowing costs coupled with the anticipated increase in the demand for Canadian exports should fuel commercial real estate purchases in the GTA.  It will be important to watch second quarter economic data, especially as it relates to business confidence and willingness to invest in the second half of 2014,” continued Ms. Lai.

 

May 2014: 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

 

May 2014

May 2013

% Change

 

May 2014

May 2013

% Change

Industrial

459,244

326,419

40.7%

Industrial

$5.30

$5.22

1.5%

Commercial

104,634

50,675

106.5%

Commercial

$21.90

$15.83

38.3%

Office

76,000

59,339

28.1%

Office

$15.15

$12.16

24.6%

Total

639,878

436,433

46.6%

Source: TREB Commercial Division

May 2014: Commercial Sales Completed with Pricing Disclosed on TorontoMLS

Sales (Price Disclosed)

Avg. Sale Price Per Sq. Ft. (Pricing Disclosed)

 

May 2014

May 2013

% Change

 

May 2014

May 2013

% Change

Industrial

14

31

-54.8%

Industrial

$142.59

$79.95

78.4%

Commercial

22

24

-8.3%

Commercial

$316.03

$219.05

44.3%

Office

14

15

-6.7%

Office

$250.62

$274.64

-8.7%

Total

50

70

-28.6%