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London leads the nation in empty downtown office space, just-released figures from the commercial realty firm CBRE show.
The core-area vacancy rate hit 31.4 per cent in the third quarter this year, a record high for the city, up from 30.6 per cent in the previous three months. That’s the highest downtown vacancy rate in Canada, CBRE states.
Calgary posted the second highest rate in the nation, at 29.6 per cent.
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“The province and city need to do more around social issues every city is facing. London has it as bad or worse than most. There’s no magic bullet,” said Greg Harris, an associate vice-president with CBRE. “The slight bump-up is a function of leases coming up, and companies are now right-sizing.
“There is no major event. It’s what’s been happening in recent years.”
Nationally, the downtown office vacancy rate remained stable but high at 19.7 per cent, and has not decreased since 2020, according to the new CBRE analysis. But larger cities are seeing increased interest and activity, giving London some hope, Harris said.
“The office markets are doing better in major cities and that will drive secondary and tertiary markets,” he said. “We started seeing an increase in activity in London in September. Downtown is being looked at, but it’s a process.”
Harris takes some comfort in more residential towers being built downtown, saying more people living in the core will “revitalize” the heart of London.
While fewer businesses occupy the downtown, the suburban office vacancy rate dropped, hitting 9.3 per cent from 10.6 earlier this year. That suggests some offices are moving as downtown businesses continue to cope with issues of construction and homelessness.
“There may be some of that,” Harris said of downtown offices moving outside the core.
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