Empty office buildings have become a national concern in Canada. The Conference Board of Canada is giving an alarm signal for the increasing number of vacant offices.
Financial Post reports that the Conference Board of Canada recently revealed that the office market "has become saturated with vacancies." Based on report, it shows that the vacancy rate of unused office has gone 9.5% already, which marks "a 10-year high."
According to director of industrial economic trends Michael Burt, it might take another two years before a significant turning in can be observed in the vacancy rate of office buildings. The board also mentioned that the "saturation in the office sector is being felt in construction, as spending has been on a steady decline since the third quarter of 2014." It is also noted that rate of the decline picked up in Q1 2015.
However, this concern of vacancy rate of commercial offices has been greatly affected when the troubles in oilpatch came out. In Calgary, it has been reported that the vacancy rate has gone 14.4% in the first half of the alone. The stat was up "from 10.6 per cent vacancy there a year ago."
In a separate report of Bloomberg, the vacancy rate in Canada for its 3rd quarter has increased its figure to 11.8%. The increase is considered "the highest since the first three months of 2005, when it was 11.9 percent" based from the report CBRE Group Inc.
There are some cities that are greatly affected by the oil slump aside from Calgary, in which the story is considered bloodbath. In fact, there are ten major cities that are identified, special mentions are Toronto, Vancouver, and Ottawa.
One indication that the situation has been worsen is when "one of the major pension funds or other institutional investors, who have a longer investing horizon and can swallow lower rents in the near-term, began marketing even one major tower." At this point, it is not happening yet.
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