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
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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).
www.colliers.com/toronto
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.