Canadian Office Occupier

Transcription

1 CBRE Limited Global Research and Consulting Canadian Office Occupier RELIEF IN SIGHT, BUT TIGHT CONDITIONS TO PERSIST IN MOST MARKETS By: Ross Moore and Judith Amoils EXECUTIVE SUMMARY Office leasing activity remains relatively robust, but with single digit downtown vacancy rates in most markets, occupiers have less leverage in lease negotiations. Tight conditions in a number of markets make strategic planning for leasing needs with sufficient lead times an imperative. Demand for quality space is greater than what is available and relief is unlikely before The relatively high rents for Class A office space in downtown markets is starting to cause corporate occupiers to consider secondary markets and/or Class B and C office space. Occupiers would be well served to take a comprehensive approach to real estate and leverage their tenancy in a landlord s portfolio in other markets. Real estate strategies are increasingly incorporating nontraditional office layouts and uses in order to balance business goals and cost constraints. Future office demand is likely to decrease as a result of new usage patterns. Office job growth slowed markedly in 2011 and the first half of 2012, but some improvement is anticipated in the later part of 2012 and Going forward, firms will add to payrolls if and when business conditions dictate. The lack of vacant space has kept a lid on absorption nationally; however, Calgary is a clear outlier with absorption rates well above the national average. OVERVIEW Leasing Fundamentals: The outlook for corporate office occupiers continues to be more challenging due to shrinking office vacancy in the face of modest economic growth and a dearth of new completions. A good number of Canadian companies in particular, those focused in growth sectors such as professional services and energy have been steadily hiring and leasing additional office space. At the same time, a lack of new supply, especially in key Canadian downtown markets, is causing vacancy rates to drop and rental rates to rise. In this environment, office market Figure 1: Canadian Office Market Rent Cycle, Q Rental Decline Accelerating Source: CBRE Ltd. Rental Decline Slowing Rental Growth Accelerating Rental Growth Slowing Montreal M Toronto T Vancouver V E Edmonton Waterloo Region WR W Winnipeg Halifax H Ottawa O C Calgary London L dynamics continues to shift from one largely dictated by occupiers to one where office occupiers are losing some degree of negotiating leverage to landlords. This is creating a certain level of urgency for tenants looking to secure premises at the lowest possible price with the longest term possible. Strengthening office market fundamentals continue to shorten the window that corporate occupiers have to successfully negotiate favourable lease terms. Corporate Real Estate Strategies: Corporate executives and real estate officers continue to be faced with the twin challenges of supporting business objectives while containing costs. Efforts to reduce costs, use space efficiently, and improve worker productivity, continue to drive significant changes in corporate real estate strategies. Other important factors impacting corporate occupier strategies include the trajectory for the Canadian, U.S. and European economies, technological advancements, talent recruitment and retention, and workforce mobility. We are observing more sophisticated occupiers improving the alignment between business needs and corporate real estate strategies through two key shifts: firstly, integrating their strategic occupancy planning functions to include business strategy, occupancy management and leasing strategy, and secondly, including a client relationship management function within the corporate real estate team. Some large occupiers are also paying increasing attention to governance around leasing commitments and application of portfolio-

2 wide space standards. Tight conditions in some downtown Canadian markets (particularly for large contiguous requirements) make strategic planning for leasing needs with sufficient lead times imperative. Given that the ownership of downtown core office space in major cities is concentrated in the hands of a small number of landlords, large occupiers are well advised to leverage their tenancy by considering their leasing strategies holistically across their national portfolio, rather than lease by lease or city by city. Changing Space Usage Patterns: Advancements in workplace design and telework are also transforming the physical office space. Companies are successfully using less space per worker, but at the same time are creating more open, progressive, inviting and increasingly collaborative work spaces. Employees work in neighbourhoods as defined by job function. Corporate real estate executives are increasingly adopting such unassigned workspaces or free address/non-territorial offices. Hoteling, where spots are reserved in advance, is also increasingly common. The trend to reduce the space per worker will continue as real estate officers rein in costs. It is estimated that shrinking the office footprint can save some office occupiers millions of dollars annually in both rent and utility costs. It is also estimated that traditional office space has a utilization rate of only 50.0% due to increased needs for collaboration, mobility-enabling devices such as laptops, tablets and smart phones that permit employees to work from virtually anywhere, as well as when travelling, off sick, or taking vacation. Increased use of online files and paperless office initiatives are also saving on filing cabinet space. Such higher space densities, albeit ones with better design, are likely to lower office space demand going forward. Outlook for the Canadian Economy: The Canadian economy finds itself in an unusual position. Against largely favourable domestic economic conditions, Canada s key trading partners face numerous challenges that call into question the rate of economic growth going forward. U.S. economic data turned positive beginning in the fourth quarter of 2011, but have turned decidedly more negative in the past 60 days. Risk assets, including all assets besides U.S. Treasuries, rallied significantly in the first quarter of 2012, reflecting better jobs and Gross Domestic Product (GDP) data, as well as the continuation of the accommodative Federal Reserve monetary policy, but with rising uncertainty around the European debt crisis the risk-off trade is back on. This is demonstrated by 10-year Treasury yields at or below 1.5%. Economies in countries such as Brazil, India and China have also shown sudden weakness, which suggests that Eurozone issues are impacting the rest of the world. Figure 2: The Canadian Economy and the Labour Market (Annual Percent Change) 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% Real GDP Growth Unemployment Rate Forecast Source: Conference Board of Canada The outlook for Canadian economic growth during the remainder of 2012 can best be characterized as modest but sustained. Data points for the first half of 2012 reinforce this view and have led us to lower the probability of more robust growth, but simultaneously, the downside is also limited. Brief highlights of key macroeconomic indicators shaping office real estate trends are noted below. Economic Growth and Office Employment: Real GDP growth averaged 1.9% annualized during the first quarter of 2012, largely stemming from a surge in business investment. The latest quarterly review by Statistics Canada shows overall business investment in facilities and equipment rose 1.2% in the first quarter. Investment in engineering projects increased 1.5% and investment in buildings expanded 1.1%. Likewise, business investment in machinery and equipment grew 1.0%, following two consecutive quarters of decline. This increase was mostly in business purchases of automobiles (+8.9%), agricultural machinery (+7.0%), and other machinery and equipment (+4.3%). Hurting growth, however, were declines in investment in computers and other office equipment (-7.0%) and in other transportation equipment (-3.1%). With May GDP data coming in below consensus at 0.1% month-over-month and 2.4% year-over-year (YoY), expect Canadian GDP growth to average between 2.0% to 2.2% in 2012 and This rate remains below the long-term growth rate of 2.5% that was achieved from and reflects sluggish growth in the global economy, high consumer debt levels and a corresponding slowdown in consumer spending and efforts by the Federal Government to reign in the housing market. Page 2

3 Employment gains through the first five months of 2012 have been somewhat mixed with March and April being well above historic norms while the other three months have disappointed. On a year-over-year basis, however, employment is up 1.2% or 203,000 jobs from May May Particularly encouraging is the fact that virtually all of this growth was in full-time work, up 192,000 or 1.4% during the same period. The labour market does appear to be softening after robust growth in 2010 and 2011, but annual growth near % per annum is reasonable bearing in mind many of the macroeconomic and demographic trends that are underway. At the end of May, the Canadian unemployment rate was 7.3%. Interestingly, employment in goods producing industries was up 3.0% YoY in June, while the service producing sector was Figure 3: Office-Using Employment (Annual Percent Change) 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% Source: CBRE-EA Forecast up a more muted 0.7%. In particular, employment in natural resources was up 12.1% YoY in June, while manufacturing jobs increased by 3.3% or 2,000 jobs. This is consistent with the RBC Purchasing Managers Index which remains comfortably above 50, indicating expansion. Helping the service sector was trade and warehousing up 3.0%, accommodation and food 1.9%, healthcare 0.8% and educational services 5.6%. Two key sources of weakness within the service producing sector were finance, insurance, and real estate (FIRE), as well as professional, scientific and technical services (PSTS). For the year ending May, FIRE and PSTS were down 1.3% and 2.3%, respectively, or 17,100 and 9,700 jobs. These two important drivers of office absorption have been relatively weak over the past several years after showing robust growth in the early years of the new millennium. Figure 3 shows growth in office employment, which combines these two sectors. Office job growth slowed markedly in 2011 and has yet to improve in 2012.There should be mild improvement in the later part of 2012 and 2013 and a return to positive territory, but not back to the 3.0% and 4.0% growth rates that were recorded a decade ago. Going forward, firms will continue to hire but only if and when business conditions dictate additions to payroll. Productivity concerns are still paramount in Canada and any addition in jobs has to be more than made up by an increase in output. Office employment will show tepid growth and keep a lid on absorption, which will keep vacancy rates at or near current levels. Business Spending: More recently, concerns have arisen over slowing growth in Europe and China and what the potential impact may be on Canada s growth trajectory. We believe that these risks are overblown in large part because Canada does very little trade with Europe and while China is an important export market for the natural resource sector, steady growth in the U.S. is a more important consideration. We expect that business spending especially by companies tied to mining and oil and gas extraction should support Canadian economic growth going forward. This is particularly true for Alberta, but British Columbia, Saskatchewan, Ontario, Quebec and Newfoundland should all benefit from the healthy energy and mining sectors. Businesses remain flush with cash and need to address productivity issues and so a pick-up in spending in machinery and technology is not unreasonable. According to Scotia Economics, spending growth should average % per year through Consumer Spending: Consumption accounts for 65.0% of the Canadian economy and its trajectory is critical to economic growth going forward. Real consumer spending has slowed over the past 18 months with growth of just 2.4% in 2011 and estimated growth of just 1.8% in This is considerably below the period when consumer spending averaged 3.2%. Household balance sheets have been stretched in recent years and minimal wage growth is beginning to limit increased consumption among Canadian households. Recent efforts by the Ministry of Finance in conjunction with Bank of Canada to put a cap on further increases in consumer debt means credit conditions are almost certain to tighten in the coming quarters. This will represent a significant headwind for consumer spending starting late this year and into If this marks the beginning of a period of deleveraging for Canadian households there will be a significant drag on economic expansion. Page 3

4 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 The biggest risk to consumer spending going forward, however, remains the housing market which appears to be overvalued based on a number of metrics. If there was a serious and prolonged correction in house prices, consumer spending would almost certainly be adversely affected; however, the housing market should remain largely unscathed and Scotia Economics estimates that consumer spending will increase by a modest 2.3% in Office Occupier Trends: The office market remains highly bifurcated, both between downtown and the suburbs and also along geographic lines. Downtown office space in primary markets is characterized by low single digit vacancy rates while market conditions in the suburban office sector remain relatively soft with double digit vacancies. Similarly, national year-to-date absorption is positive 3.4 million SF, positive 2.6 million SF of which was in Western Canada, while the eastern part of the country recorded positive 800,000 SF of absorption. The average office vacancy rate across both downtown and suburban submarkets was down slightly in the second quarter to 8.2%. A pervading theme in the Canadian office market is the desire by corporate real estate officers to improve office space efficiency by decreasing the amount of space required per worker as new technologies and advanced workplace designs are adopted. Going forward the focus will be on the next wave of office development. Toronto, Calgary, Montreal and Vancouver all have a number of new office towers underway. At mid-year, office construction activity in both downtown and suburban markets totalled 15.0 million SF, nearly double the 7.9 million SF underway a year ago. Most of this new construction is in downtown markets; however, 6.3 million SF (42.0%) is located in the suburbs, which shows that suburban markets are far from moribund. The construction of new inventory will provide more LEED certified options in a number of cities, and occupiers are taking advantage. When assessing office space options, corporate occupiers are typically seeking locations and space that have the following characteristics: Within walking distance of public transportation. Flexible floor plates. On-site amenities (food options, exercise facilities, day care, etc.). Access to daylight. Low carbon footprint (LEED certification, active recycling program, use of renewable energy sources, etc.). Locations that meet the commute and life-style preferences of a Generation Y and Millenial workforce. Locations that meet business continuity needs. Locations that provide appropriate price points (e.g. downtown versus suburban) for various types of office occupancies (e.g. space for knowledge work versus back office work, such as call centres. In low vacancy markets, where demand for quality space is greater than what is available, rents, concessions and tenant inducement packages are moving in favour of the landlord. As 2012 unfolds, the relatively higher rents for Class A office space in downtown markets may shift corporate occupiers to consider secondary markets and/or Class B and C office space. For the near-term, office occupiers have more choice in these markets. Figure 4a: Suburban Supply and Demand Completions Absorption Vacancy Rate Figure 4b: Downtown Supply and Demand Completions Absorption Vacancy Rate 2.0 SF (Millions) Vacancy Rate 16.0% 4.0 SF (Millions) Vacancy Rate 16.0% % % % % % % % % % % % Source: CBRE Ltd. Source: CBRE Ltd. Page 4

5 Office market fundamentals will continue to move in favour of landlords through 2012 and into Recent office employment data while weak is sufficiently strong to keep occupancy levels in the black. The lack of new supply is another important factor in the sustained move towards markets favouring landlords. We expect the better-quality office space located in Central Business Districts (CBD) to be highly sought after and will be where rental growth is most pronounced. OFFICE MARKET SNAPSHOTS National trends are often contradictory and this quarter is not an exception. Cities such as Calgary and Vancouver are very challenging for tenants despite the backdrop of fairly benign growth. To a lesser degree this is also true for Toronto, but against historic standards tenants will have a fairly tough time finding appropriate space in Canada s largest office market. Canada s other office markets can more easily accommodate office users, but unless there is a complete collapse in the Canadian economy, most office tenants will find limited options when their current lease expires or new premises are required. To a large degree, tenants will have to make do with what they have until the office towers are completed in late 2014/early For some tenants, this will feel like an eternity. TORONTO: Greater Toronto Area (GTA) office market fundamentals are mostly unchanged since the first quarter. Both vacancy and demand have been relatively flat for five consecutive quarters, however, vacancy rates did increase slightly across the GTA, up 10 basis points (bps) quarterover-quarter (q/q) to 8.0%, with Central market vacancy unchanged at 5.2% (q/q) and Suburban vacancy up 40 bps to 11.4% (q/q). Factors affecting the lackluster leasing activity differ across the GTA. In suburban markets, the deteriorating global economic climate is beginning to take its toll on businesses that are now hesitant to make large moves. Conversely, in central markets, tenants are squeezed for space yet are faced with a supply crunch driven by decreased availability of large blocks of space. This supply crunch is not expected to subside until late 2013, when the first of the new office developments currently underway begin coming online. The Downtown market is in the midst of a new construction cycle, which saw space under construction quadruple to 3.8 million SF in the second quarter of Four new developments were announced, representing nearly 6.0% of current total inventory. Premier Class A towers, such as Bay Adelaide Centre East, RBC WaterPark Place, and Bremner Tower 2, will bring relief to the tight Financial Core and Downtown South submarkets. Vacancy is expected to rise slightly in the coming years as tenants such as Marsh Mercer and Deloitte move into the new builds and vacate their existing downtown space. The 1.3 million SF of space under construction in suburban markets currently accounts for 25.2% of new development in the GTA. Four new office developments were completed in the suburban markets this quarter, all in the GTA West. These developments include the 250,000 SF First Meadowvale Corporate Centre II and three smaller buildings in Oakville totalling 122,895 SF. New suburban projects underway include the 78,000 SF 7685 Hurontario Street in Brampton and a 250,000 SF building on Hurontario Street in the Highway 10/401 submarket. MONTREAL: The Greater Montreal Area (GMA) office market continues to tighten. Vacancy has declined in most submarkets, with overall vacancy down from 8.9% at midyear 2011 to 8.5% at mid-year This trend is expected to continue. The CBD, however, experienced a jump in vacancy in the first quarter of 2012 due to a significant increase in sublet space in both Class A and B buildings. Vacancy has since rebounded and some of this sublet space is in the process of being leased. Although the CBD experienced a decline in vacancy from 7.2% in the first quarter of 2012 to 6.8% in the second quarter, average asking lease rates (AALRs) in both Class A and B product declined modestly. AALRs are expected to increase in the second half of There are only six contiguous blocks of space over 25,000 SF available in the downtown market, however, new construction and future availabilities will result in three additional availabilities. New construction activity in the GMA is at its highest level in several years, with properties underway in many submarkets. The big news for downtown is the lease of approximately 95,000 SF to AIMIA in Viger Tower. They will be the lead tenant in the building upon completion and the building will be named AIMIA Tower. Cadillac Fairview announced plans to build 514,000 SF adjacent to the Bell Centre. Deloitte will be the lead tenant. Sublet space has increased to levels not recorded even in the recession of There was 943,000 SF of sublet space available at the end of the second quarter, and for the first time in many years the amount of sublet space in the suburban markets exceeded the amount available in the downtown markets. While there was positive leasing momentum this quarter, there is a notable amount of available space on the horizon, such as the 71,000 SF at 1 Place-Ville-Marie that RBC will no Page 5

6 longer require as of October 2013, and 140,000 SF of space at 1350 Rene-Levesque West that CGI is giving back in May In addition to this, there is 158,000 SF of space remaining at AIMIA Tower, which will be ready by the end of CALGARY: Following an active first quarter, Calgary s Downtown office market experienced another upbeat quarter. The oil and gas industry continues to drive tenant demand for better quality office space as Class AA and Class A vacancy rates hovered below 2.0%. Occupiers seeking top-quality space have increasingly been broadening their search horizons to include Class B and Class C buildings in response to limited Class A options and a sharp increase in asking rents for the best space. Approximately 400,000 SF of positive absorption was recorded during the quarter in the Downtown market, which pushed year-to-date absorption to more than 2.0 million SF. The increase in occupied space caused the vacancy rate for the Downtown market to fall 110 bps to 5.0%. The majority of leased up space during the second quarter was the result of strong demand for quality space as evidenced by the 233,512 SF absorbed in Class A properties. Accordingly, the Class A market saw its vacancy rate drop by 190 bps to 2.1%. Owing to the aforementioned rental rate increases and shortage of Class A space, the Class B and Class C subsectors were also the recipients of relatively strong absorption, with positive 105,336 SF for Class B and 57,365 SF for Class C, respectively. This continued to reduce their respective vacancy rates by 110 bps to 9.9% for Class B and 140 bps to 11.9% for Class C. Asking rents continued to rise across the downtown core due to the shrinking amount of available space. Although overall asking rents registered a modest 3.6% increase during the quarter, both Class AA and Class A properties recorded steep gains of 10.8% and 8.4%, respectively. The advance in Class B asking rents was a more subdued at 5.8%, which left headline rents at $25.96 psf. Class C rates followed a similar pattern by expanding 5.0% to $18.19 psf. The headline asking rates of $42.34 psf for Class AA and $35.40 psf for Class A are the highest since early The pace of rent growth may quicken given the limited supply pipeline. The next new office tower will not be delivered to the market until With Class AA and Class A vacancy so low, a new development cycle is underway. Eighth Avenue Place s West tower is entirely pre-leased and is expected to be complete in Cadillac Fairview s City Centre has 130,000 SF pre-leased and is under construction, with an expected completion date of mid With only two office towers in the development pipeline, several additional developments are currently in the pre-leasing stage. Oxford s Eau Claire Tower has yet to secure pre-leasing commitments with construction widely-expected to commence once that requirement has been fulfilled. Brookfield s Herald Block and Matthews Development s southern portion of The Bow are planned, but will also require pre-leasing before construction begins. VANCOUVER: The Metro Vancouver office market experienced a minor increase in vacancy and a slight reduction in occupied space in the second quarter of 2012, as business confidence continued to moderate in response to global economic conditions. While the regional office market remains insulated from external forces and has fared well in 2012, hesitation within the local tenant base impacted office market fundamentals this quarter. There are limited options for space in the downtown markets which provided some stability, but demand moderated in the overall market. Burnaby and Broadway experienced a modest level of activity within their existing tenant bases; however, few large deals have taken place in 2012 and leasing velocity remains below what was recorded in These factors are indicative of a more cautious market. The regional office vacancy rate inched up 40 bps from last quarter to 8.0% as a result of negative 195,364 SF of absorption, which was spread across all submarkets. The Downtown office market recorded negative 24,558 SF of absorption as record low vacancies continue to restrict leasing activity, while the Suburban office market posted negative 170,806 SF of absorption during the quarter. Despite this modest drop in occupied space, gross leasing activity totaled 664,190 SF over the quarter and 1.3 million SF year-to-date (YTD), which is an indicator that healthy leasing activity is being achieved through tenant roll-overs and small tenant expansions. In the downtown core for instance, there has been negative 30,184 SF of absorption YTD, however, this was offset by 582,231 SF of gross leasing activity. There is 2.2 million SF of office space currently under construction in Metro Vancouver, which is the largest amount since the onset of the global financial crisis. The total amount of space is relatively balanced between downtown and suburban markets as 1.1 million SF is currently under construction in both markets. Confidence in the staying power of the Metro Vancouver office market is helping developers bring more projects to the market, Page 6

7 especially in a number of suburban markets such as New Westminster, Surrey and Langley where private groups are building projects ranging from 40,000 SF to 100,000 SF in size. In Burnaby, where demand among engineering and technology firms remained strong, the sixth phase of Broadway Tech Centre (175,000 SF) at 2920 Virtual Way recently started construction after Golder Associates pre-leased 120,000 SF, bringing the building to 68.5% pre-leased. Figure 5: Canadian Office Market Snapshot While conditions will remain largely the same during the remainder of 2012 for the Metro Vancouver office market, economic headwinds are beginning to affect demand, primarily in the suburban office market. While an all-out reversal in market fundamentals is not expected, we also do not foresee a dramatic surge in activity. Overall, stable but not robust market activity is anticipated. Lowest Vacancy Rates Overall Market % Downtown % Suburban % Calgary 7.0 Vancouver 3.6 Ottawa 8.7 Ottawa 7.2 Calgary 5.0 Waterloo Region 8.8 Vancouver 8.0 Toronto 5.2 Halifax 8.9 Toronto 8.0 Ottawa 5.7 Calgary 10.7 Montreal 8.5 Montreal 6.8 London 11.1 Highest Vacancy Rates Overall Market % Downtown % Suburban % London 14.6 London 15.5 Winnipeg 15.3 Edmonton 9.9 Halifax 9.8 Vancouver 12.7 Winnipeg 9.8 Waterloo Region 9.6 Montreal 11.5 Halifax 9.3 Edmonton 9.2 Toronto 11.4 Waterloo Region 9.1 Winnipeg 8.2 Edmonton 11.2 Largest Quarterly Decreases Overall Market Bps Downtown Bps Suburban Bps Ottawa -90 Calgary -110 Winnipeg -110 Edmonton -60 Halifax -70 Ottawa -100 Montreal -50 Ottawa -60 Edmonton Montreal -40 Montreal Edmonton Largest Quarterly Increases Overall Market Bps Downtown Bps Suburban Bps Vancouver 40 Winnipeg 50 Calgary 180 London 30 London 30 Halifax 100 Halifax 30 Vancouver 20 Vancouver 70 Winnipeg 10 Waterloo Region 20 Toronto 40 Waterloo London 20 Page 7

8 Figure 6: Office Rents by Market Downtown Class A Office Rent ($/SF/Annum) 2Q Q 2011 Percent Change (Y/Y) Calgary - Downtown $38.87 $ % Calgary - Suburban $24.03 $ % Calgary $28.46 $ % Edmonton - Downtown $20.85 $ % Edmonton - Suburban $19.08 $ % Edmonton $20.49 $ % Halifax - Downtown $18.14 $ % Halifax - Suburban $16.44 $ % Halifax $17.25 $ % London - Downtown $13.04 $ % London - Suburban London $13.04 $ % Montreal - Downtown $20.95 $ % Montreal - Suburban $13.88 $ % Montreal $17.89 $ % Ottawa - Downtown $27.06 $ % Ottawa - Suburban $13.83 $ % Ottawa $18.00 $ % Toronto - Downtown $25.28 $ % Toronto - Suburban $16.34 $ % Toronto $20.15 $ % Vancouver - Downtown $35.39 $ % Vancouver - Suburban $20.93 $ % Vancouver $22.03 $ % Waterloo Region - Downtown $13.40 $ % Waterloo Region - Suburban $15.79 $ % Waterloo Region $15.12 $ % Winnipeg - Downtown $16.00 $ % Winnipeg - Suburban Winnipeg $16.00 $ % Page 8

9 Figure 7: Office Vacancy Market Area Size Rank Calgary 3 Edmonton 6 Vancouver 4 Winnipeg 9 West Downtown Suburban Overall Downtown Suburban Overall Market Area Size Rank Halifax London Montreal Ottawa Toronto Waterloo East FOR MORE INFORMATION PLEASE CONTACT: Ross J. Moore Director of Research, Canada CBRE Global Research and Consulting T: ross.moore@cbre.com Roelof van Dijk Research Manager, Canada CBRE Global Research and Consulting T: roelof.vandijk@cbre.com Judith Amoils Managing Director Global Corporate Services T: judith.amoils@cbre.com Ricky Hernden Senior Research Analyst, Canada CBRE Global Research and Consulting T: ricky.hernden@cbre.com This disclaimer shall apply to CBRE Limited, Brokerage, and to all other divisions of the Corporation ( CBRE ). The information set out herein (the Information ) has not been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or assume any responsibility or liability, direct or consequential, for the Information or the recipient s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE.