The segment is benefiting from a multitude of positive market pressures, new report says
A resurgent leasing market, coupled with sustained strength in the energy sector, propelled Calgary’s office segment significantly during the third quarter, according to Avison Young.
The Q3 overall vacancy rate stood at 23.9%, which was down by 2.2% on an annual basis. The market strength was especially apparent in the Class AA sector, which posted a vacancy rate of 15% (down by 2.8% since Q3 2021).
Calgary saw its fourth straight quarter of recovery with 314,442 square feet of positive overall absorption during the third quarter, Avison Young reported.
“Vacancy rates have begun to flatten and trend downwards as more employees returned to the office at the beginning of the fall season,” Avison Young said.
The Calgary office segment is also benefiting from the sharp rise in the province’s net inbound migration during the latter half of 2022.
“It’s within the long-term demographic trends and fundamentals where Calgary’s advantage is truly found,” Avison Young said.
Aside from its appeal to migrants, the province’s favourable commodities environment “is helping energy companies feel more secure in their office planning decisions,” Avison Young said.
“Government support and funding has [also] allowed non-traditional industries the ability to find a foothold in the market.”