C O L L I E R S I N T E R N AT I O N A L
G TA S U B L E A S E R E P O RT O F F I C E M A R K E T U P D AT E
|
SEPTEMBER 2009
SUBLEASES BY NUMBERS The GTA sublease market remained constant in September, edging up a fraction of a percent. Available sublet space increased by 0.6 per cent or 24,000 sq. ft. during September 2009. With this, available sublet space is now at 3.887 million sq. ft. across all office buildings in the GTA.
# of Sublease Availabilities*
Sublease Size in sf - Mean
Total sf of Subleases
Remaining Term in months Mean
Average Asking Net Rent psf
Comparing the region by market, downtown continues to be the largest sublet market with almost 1.4 million sq. ft. of sublet space. In the Central markets, midtown grew by 7.3 per cent, while downtown shrank by 2.1 per cent. Strong growth was recorded in some suburban markets with GTA East leading the charge rising 17.6 per cent or 57,000 sq. ft.
GTA
464
8,377
3,887,066
42
$12.29
Downtown
164
8,318
1,364,189
41
$13.51
Midtown
49
5,764
282,434
45
$14.49
GTA North
41
9,253
379,358
50
$11.56
The number of listings dropped 1 to 464 and the average size of sublet listings stayed virtually flat, increasing by 70 sq. ft. to 8,377 sq. ft. as did the GTA-wide average of the remaining term which stayed at 42 months. New listings were distributed evenly across the entire GTA, with no one market adding or losing more space than average.
GTA West
123
8,698
1,069,845
41
$12.54
GTA East
87
9,095
791,239
43
$10.31
* Note: For this statistic the smallest available units are considered. Any contiguous & divisible units are NOT included.
More than half of the sublet listings don’t quote asking net rent as sublandlords are often prohibited to post rents by their head-lease. Of those that did, we observed a moderate decrease (2.88 per cent) during September 2009. The largest discounts were recorded in downtown (44 per cent) and GTA North (34 per cent). At the end of September, sublet space in the GTA was discounted on average by 30 per cent compared to direct space, up from the 26 per cent discount offered in August 2009.
tREMAINING
TERM OF SUBLEASES IN THE GTA OFFICE MARKET
AVAILABLE SUBLET SPACE BY BUILDING CLASS
Over half of the sublet listings have a remaining lease term of over three years. Many companies with longer terms left on their lease agreement are putting unused space onto the market as indicated by an increasing ratio of sublets with a remaining lease term and more. It currently sits Remainingof Termthree of Subleasesyears in the GTA Office Market as of October 2, 2009 at 53 per cent. 100
92
90
88
88
84
80
# of Subleases
70
64
60 50 40 31 30 20 10 0 12 Months or less
13 to 24 Months
25 to 36 Months
37 to 48 Months
49 to 60 Months
SUBLEASES BY SIZE Listings with a size range between 0 and 10,000 sq. ft. remain in the majority in terms of number of listings (71 per cent) and steady in terms of total square footage available for sublease (36 per cent).
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More than 60 Months
61 per cent of the sublet space is located in Class A buildings, which is higher than the Class A space inventory share of the total office inventory, currently sitting at 46 per cent. This disproportion is especially pronounced in GTA North, downtown and midtown markets.
GTA Sublease Report | October 2009 | Office Market Update
AVAILABILITY TREND*
COLLIERS FAST FACTS
Total available office space increased by over 454,000 sq. ft. or more than 2.4 per cent to approximately 18.4 million sq. ft. in September 2009. This growth is a resumption of the recent growth trend which was briefly checked in July 2009. With continued delivery of new development projects across the GTA, expect this figure to continue to climb steadily. The growth in available space was evident in the central markets as they rose 2.1 per cent, while the suburban markets shrank by 4.8 per cent. In the Central markets, the majority of space brought to market was direct space (94 per cent), whereas the suburban markets shrank by 100,000 sq. ft. of sublease space and 40,000 sq. ft. of direct space. Over all, sublet space represents 20.3 per cent of currently marketed space, down from 21.1 per cent in August and 17.4 per cent this time last year. The proportion of sublet space in the GTA continues to be in the Suburban markets favour, with 57 per cent of all marketed sublet space being outside the Central markets. * in surveyed office buildings of 10,000 sf or more in size GTA All Classes Availability Trend Q1 2007 - Q3 2009
GTA - ALL CLASSES:
Total Available Space
Available Sublease Space
% of Available Sublease Space of Total Available Space
44,405 Transactions 4,660 Professionals $48.1 billion total transaction value
John Arnoldi Managing Director Office Practice Group 416.777.2200 John.Arnoldi@colliers.com
17,415,607 16,046,126
14,856,566
17,444,652
16,000,910
14,243,451 13,330,296
14,563,318
14,000,000
14,348,510
13,889,803
Avvailable Space in sf
1.1 billion sq. ft. under management
CONTACT INFORMATION
18,418,866
16,000,000
$1.6 billion in revenue
Q1 2007 - Q3 2009
20,000,000
18,000,000
22 OFFICES IN CANADA
12,000,000
10,000,000
22.8%
21.7%
20.5% 8,000,000
18 0% 18.0%
20.7%
19.4%
3,379,243
2,948,442
2,458,383
3,272,612
20.3% 18.2%
17.4%
16.5%
6,000,000
4,000,000
20.3%
3,318,350
2,000,000
3,730,547
2,916,752
2,312,997
3,548,072
3,010,886
2,581,139
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Source: Colliers International, October 2009
Q1 2008
Q2 2008
Q3 2008
GTA CENTRAL MARKETS - ALL CLASSES: Total Available Space
Q4 2008
GTA Central Markets All Classes Availability Trend Q1 2007 - Q3 2009 Q1 2007 Available Sublease Space
Q1 2009
Duerten Lindenbeck Senior Research Analyst 416.643.3764 Duerten.Lindenbeck@colliers.com
Q2 2009
Q3 2009
- Q3 2009
Ian Thompson Research Analyst 416.643.3765 Ian.Thompson@colliers.com
% of Available Sublease Space of Total Available Space
9,000,000 8,530,632 8,000,000 7,385,492 7,113,418 7,000,000
6,440,408
Avvailable Space in sf
5,888,260
6,483,507
6,000,000
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7,862,650
6,480,440
7,077,431
6,391,543
6,439,544
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5,000,000
4,000,000
20.0%
19.8%
19 9% 19.9%
18.0%
17.4% 3,000,000
19.0% 18.0%
16.9%
18.0%
17.7%
15.8% 2,000,000
1,251,693
1,553,710
1,298,357
1,229,159 1,000,000
1,271,793 1,165,094
1,017,747
1,161,438
1,623,184 1,258,564
1,059,999
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Source: Colliers International, October 2009
Q1 2008
Q2 2008
Q3 2008
GTA Suburban Markets All Classes Availability Trend Q1 2007 - Q3 2009 Q1
GTA SUBURBAN MARKETS - ALL CLASSES: Total Available Space
Available Sublease Space
Q4 2008
Q1 2009
Q2 2009
Q3 2009
2007 - Q3 2009
% of Available Sublease Space of Total Available Space
12,000,000
10,000,000
10,030,115
9,888,234
8,859,580
8,416,157
8,000,000
Avvailable Space in sf
8,932,707
8,162,088
7,775,932
6,000,000
9,582,002
7,442,036 7,908,966
7,791,643
21.2% 21.3% 19 0% 19.0% 20.6%
17.1%
4,000,000
19.5%
18.6%
16.8%
20.8% 18.0%
1,994,362
1,828,104
2,000,000
19.7%
1,605,239
2,127,550 1,440,636
1,522,437 1,480,463
1,419,701
2,107,363
1,658,188
1,252,998
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Source: Colliers International, October 2009
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This is a research document of Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009. Questions related to information herein should be directed to the Research Department at 416.777.2200.The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009 is an owner member of Colliers International, a worldwide real estate partnership with offices in the Americas, Europe, Asia, Australia and Africa.