TORONTO, May 3, 2012 -- Toronto Real Estate Board Commercial Division Members leased a total of 675,474 square feet of commercial space in April 2012, representing a decline of 20 per cent in comparison to April 2011. Approximately 91 per cent (612,132 square feet) of April leasing activity was accounted for by industrial space – down by 17 per cent compared to a year earlier.
The average lease rate for industrial properties was $4.60 per square foot net (calculated for transactions where pricing was disclosed). This result was up by more than six per cent in comparison to April 2011. Average lease rates for other commercial and office properties were also up year-over-year in April.
“The past year has been an interesting time for commercial real estate in the GTA. Domestic demand in Canada, including business investment, has been strong. This has certainly prompted some businesses to take on new space. At the same time, however, the recovery of the export sector has been anemic.
Many GTA businesses focussed on the production of goods or services for foreign markets have likely put real estate decisions on hold,” said TREB Commercial Division Chair Larry Purchase.
Commercial Division Members reported a total of 44 sales (industrial and other commercial combined) through the TorontoMLS system in April 2012 – up by 16 per cent in comparison to April 2011. The annual change in average selling prices was mixed. The average industrial sale price per square foot was down by 13.7 per cent, while the average sale price for other commercial categories was up by 27.3 per cent.
“The composition of transactions can differ from one year to the next. There were a greater number of industrial transactions involving large properties this April compared to last. Because larger properties tend to trade for less on a per square foot basis, it makes sense that the average industrial price was down year-over-year. Conversely, other commercial transactions were weighted toward smaller unit sizes this year, helping explain some of the increase in the average selling price for this market segment,” continued Purchase.