A study shows that the proportion of vacant offices in the city center is steadily increasing. At the current 15.8%, the office availability rate could increase to 21%.
Posted at 6am yesterday
At worst, reducing the city center’s attractiveness to workers in service firms will help empty the equivalent of 11 skyscrapers like Place Ville Marie, according to a document released Friday midday by the Board of Trade of Metropolitan Montreal.
This study complements the previous one of February 25, which focused on new forms of work and consumption organization in the inner city. The one that has just been published deals more specifically with the administration of surplus offices.
Thus, without accounting for other factors, downtown would have 1.07 million square meters (or 11.4 million square feet) of excess office space.
Older office buildings in particular, so-called B and C categories, will suffer as a result.
But the Chamber of Commerce believes the reality will be less dramatic as Montreal attracts foreign investment and some of the downtown businesses grow.
Since 2020, Montreal International has attracted 97 downtown investment projects employing 10,000 people, its CEO Stéphane Paquet points out. Three-quarters of the projects concern information technology and video game companies. The big newcomers include AppDirect (400 positions), Behavox (325 positions) and Phoenix Labs (250 positions).
Downtown must remain attractive to young tech shooters if we want offices to fill up.
“In the past, the city center was expensive and seemed outdated in the eyes of the techno workers who preferred Mile-Ex,” Michel Leblanc, the chamber of commerce’s president and chief executive officer, told a crowd. What has changed since then [le début de la pandémie de COVID-19]is the availability of downtown offices and the settlement of players such as Google [sur l’avenue Viger Ouest], it hits the mind. »
The Board of Trade of Metropolitan Montreal wants to get involved and offers Espaces et vie, a virtual marketplace facilitating collaboration between companies with excess office space and companies looking for office space, especially SMEs and young people. The aim is to “expand the competitive advantages of the city center such as prestige and accessibility by public transport and to revitalize jobs,” says the study.
shock on demand
The office market in the city center is suffering because it is being hit from two sides.
First, the popularity of teleworking is impacting demand for office space. “By 2022, the introduction of hybrid working models will reduce the number of workers present in the city center every day by 19 to 25%,” says the document, whose observations are based in particular on a survey of 255 start-ups and SMEs.
The potential shock to office demand is likely to be spread over time, with around 7% of leases expiring each year, it notes.
Downtown, new office towers will be delivered during the same period, adding a total of 147,000 square meters (or 1.58 million square feet) to the inventory. Think, among other things, of the new headquarters of the National Bank.
In the first quarter, large companies did not hesitate to re-let large areas, the real estate agency CBRE states in its current report on the market situation in the city centre. Laurentian Bank, increasingly managed out of Toronto, has released 10,800 sqm (or 116,000 sq ft) at 1360 René-Lévesque Boulevard West for sublease. Another example: Ottawa-based Shopify subleases 5,760 sqm (or 62,000 sq ft) of office space at 525 Viger Avenue West.