| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Historical Data Period | 2019 - 2023 |
| CAGR | 3.00% |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Canada Office Real Estate Market Analysis
The Canada Office Real Estate Market is expected to register a CAGR of 3% during the forecast period.
- The Canadian office real estate market has reportedly been experiencing a division between high-quality and older office spaces. Market trends indicate strong demand for modern, well-amenitized buildings, while older properties are said to be facing higher vacancy rates. Landlords are reportedly responding to these challenges by investing in capital improvements and exploring property conversions to align with evolving market dynamics. The trend of "flight-to-quality" is believed to be driving tenants toward premium office spaces, suggesting a shift in the market toward higher-quality offerings to meet tenant expectations.
- Government initiatives are reportedly influencing the Canadian office real estate market. For instance, in January 2025, the Government of Canada is expected to add six additional federal properties to the Canada Public Land Bank for housing development. This initiative is aimed at addressing the housing crisis by converting underutilized federal office spaces into residential units, which could potentially impact the availability and utilization of office spaces.
- Infrastructure Canada's 2024-25 Departmental Plan is said to outline priorities and associated costs for urban development and public infrastructure in the upcoming fiscal years. These plans are expected to guide investments in infrastructure, which could indirectly affect the demand for office spaces by shaping urban landscapes and accessibility.
- Technological advancements are reportedly playing a significant role in the Canadian office real estate market. Property owners are said to be increasingly adopting advanced systems to enhance tenant experiences, optimize energy usage, and improve building security. Smart building technologies, which include sensors, automation, and data analytics, are being utilized to monitor and control systems such as lighting and HVAC. These innovations are believed to reduce operational costs while providing a more efficient and comfortable environment for occupants, making them a key factor in the market's evolution.
- In conclusion, the Canadian office real estate market appears to be undergoing significant changes driven by tenant preferences, government initiatives, and technological advancements. The focus on high-quality spaces, coupled with efforts to repurpose older properties and integrate smart technologies, reflects a market adapting to meet modern demands and expectations.
Canada Office Real Estate Market Trends
Impact of Hybrid Work Models on the Market
The Canada Office Real Estate Market is undergoing a period of transformation, driven by changing tenant preferences, economic factors, and the ongoing impact of hybrid work models. The market is witnessing a clear bifurcation, with Class-A office spaces gaining traction due to increased demand and rising rental rates, while Class-B and Class-C spaces continue to struggle with lower demand and higher vacancy rates. These trends are reshaping the market landscape, as businesses and investors prioritize premium office spaces to meet evolving workforce needs and attract tenants seeking modern, high-quality facilities.
Reports indicated that Quebec City had the lowest office availability rate at 12.3%, reflecting a relatively stable demand for office spaces in the region. In contrast, Calgary recorded the highest availability rate at 22.6%, despite ongoing efforts to repurpose and reduce unused spaces. This disparity highlights the regional variations within the market, with some cities adapting more effectively to changing dynamics than others. The growing preference for Class-A spaces is further driving investments toward high-quality developments, which is expected to influence the overall market trajectory.
In the third quarter of 2024, the national office availability rate reportedly increased by 50 basis points, reaching a record high of 18.2%. This rise occurred even as sublet space availability continued to decline, indicating a complex supply-demand dynamic within the market. During the same period, eight office buildings were completed, adding 1.28 million square feet of space to the market, with 77.3% of this space still available. Vancouver, Toronto, and Calgary were identified as the only markets to record office completions, with notable projects such as Portland Commons in Toronto, Ontario, and the Discovery Campus in Burnaby, British Columbia. These developments underscore the ongoing modernization of office infrastructure in key urban centers, which is expected to enhance market competitiveness and attract tenants seeking state-of-the-art facilities.
Additionally, it was reported that 36 office projects were under construction nationwide in Q3 2024, contributing a total of 5.8 million square feet of new office space, with 38% of this space available for lease. Vancouver and Toronto emerged as leaders in office construction activity, with 17 and 13 projects underway, respectively, accounting for 2.1 million and 3.3 million square feet of space. This construction activity reflects the continued focus on urban hubs as centers of economic activity and innovation. By catering to evolving tenant demands and preferences, these developments are expected to shape the future of the Canada Office Real Estate Market and drive long-term growth.
In conclusion, the Canada Office Real Estate Market is navigating a transformative phase, characterized by a growing divide between premium and lower-tier office spaces, regional disparities, and the influence of hybrid work models. While challenges such as high vacancy rates in Class-B and Class-C spaces persist, ongoing construction and modernization efforts in major cities like Toronto and Vancouver are expected to redefine the market landscape. These developments indicate a gradual alignment of supply with demand, positioning the market for potential stabilization and growth in the coming years.
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Toronto Being the Leading Contributor in the Market
The office real estate market in Canada continues to evolve, with Toronto maintaining its position as the leading contributor among major cities such as Ottawa and Montreal. Industry observers have noted that Toronto's office market, as of 2024, remains the largest in the country and often serves as a benchmark for trends influencing other Canadian markets. By the end of Q2 2024, the Greater Toronto Area (GTA) recorded an office vacancy rate of 12.6%, which represented the highest level since Q1 2020. Analysts attributed this increase, which reflected a 100-basis point (bps) rise over the previous quarter and a 170 bps year-over-year (YoY) growth, to challenges faced by Class A properties in particular.
Market participants highlighted significant leasing activity in late 2024, with EY Canada renewing its long-term lease at Toronto's EY Tower. The company reportedly expanded its space by nearly 50,000 square feet, bringing its total occupancy to 300,000 square feet. This lease renewal was identified as the largest in Toronto for 2024, signaling confidence in the city’s premium office spaces. Additionally, CIBC Square II, a 50-storey development scheduled for completion in mid-2025, was described as a transformative addition to Toronto's office landscape. The building, offering 1.4 million square feet of premium office space, has already secured CPP Investments as one of its initial tenants, reflecting strong pre-leasing activity in the market.
Reports indicated that over 2 million square feet of office space returned to the GTA market in Q2 2024, with the majority of this space categorized under Class A and B properties. Despite this influx, net absorption for the quarter reportedly exceeded that of Q2 2023, suggesting that tenant activity remained robust. However, it was noted that most new leases involved tenants rightsizing their office spaces, reflecting a shift in demand patterns. By the end of Q2 2024, the average asking net rent across all office classes in the GTA was reported at USD 25.89 per square foot, representing a marginal decline from the previous quarter and a similar YoY decrease. Downtown Toronto was highlighted as having the second-highest vacancy rate in the region, at 13.7%. This figure marked an increase of 170 bps from Q1 2024 and a notable 280 bps rise from the previous year, when the rate stood at 10.9%.
Overall, the developments in Canada’s office real estate market, particularly in Toronto, underscore the ongoing adjustments within the sector. The rise in vacancy rates, coupled with significant leasing activities and new developments, reflects a market in transition. These trends are shaping the landscape, with stakeholders adapting to evolving tenant preferences and economic conditions. The market's trajectory in the coming years will likely hinge on how effectively it balances supply and demand dynamics while addressing the changing needs of occupiers.
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Canada Office Real Estate Industry Overview
In Canada, a multitude of developers, investors, and property management firms contribute to a fragmented office real estate market. This fragmentation not only highlights the market's low concentration but also fuels competition and innovation. As firms adapt to shifting workplace trends and evolving tenant demands, they offer a diverse array of office spaces tailored to varied business needs and preferences. Major players include, Brookfield Asset Management Inc, Pinnacle International, Amacon, Avison Young (Canada) Inc. and CDNGLOBAL.
For instance, in February 2024, Harbor announced its acquisition of Pinnacle, a leading legal technology and managed services provider in the UK, Europe, North America, and Asia Pacific. This acquisition was projected to influence the Canada office real estate market by enabling Harbor to expand its service offerings to law firms and corporate law departments in Canada. The increased demand for legal and corporate services was anticipated to drive the need for office spaces, particularly in major Canadian cities.
Canada Office Real Estate Market Leaders
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Pinnacle International
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Amacon
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Avison Young (Canada) Inc.
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Morguard Corporation
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Oxford Properties
- *Disclaimer: Major Players sorted in no particular order
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Canada Office Real Estate Market News
- January 2025: Oxford, headquartered in Toronto, acquired a Manchester industrial estate from Network Space Developments for GBP 47 million (USD 58.45 million), facilitated by M7. This transaction, the first for the newly established joint venture between Oxford Properties and AustralianSuper, was expected to strengthen Oxford Properties' global portfolio and enhance its ability to attract international investments into the Canada office real estate market. The acquisition demonstrated Oxford's strategic focus on industrial and logistics assets, which could indirectly drive demand for office spaces in Canada by fostering economic growth and investor confidence.
- December 2024: Avison Young announced the expansion of its service delivery to clients with the addition of an affiliate office in St. John’s, Newfoundland. This development directly influenced the Canada office real estate market by increasing the firm's footprint to 17 offices nationwide, thereby enhancing its ability to provide comprehensive real estate solutions. The expansion was expected to boost demand for office spaces in Canada by attracting more businesses and fostering regional economic activity.
Canada Office Real Estate Industry Segmentation
The Office Real Estate Market is defined as the sector involving the buying, selling, leasing, and development of office spaces designed for businesses and professionals. It is shaped by economic conditions, employment trends, and workplace shifts, including remote and hybrid work models. Key participants in this market include real estate developers, investors, tenants, and property management firms. Demand drivers include business expansions, interest rates, and location preferences. The market is characterized by trends such as flexible workspaces, sustainability initiatives, and the adoption of smart office technology.
The Canada Office Real Estate Market is Segmented by Major Cities (Toronto, Ottawa, and Montreal). The report offers market size and market forecasts for Canada Office Real Estate Market in value (USD).
| By Cities | Toronto |
| Ottawa | |
| Montreal | |
| Others |
By Cities
| Toronto |
| Ottawa |
| Montreal |
| Others |
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Canada Office Real Estate Market Research FAQs
What is the current Canada Office Real Estate Market size?
The Canada Office Real Estate Market is projected to register a CAGR of 3% during the forecast period (2025-2030)
Who are the key players in Canada Office Real Estate Market?
Pinnacle International, Amacon, Avison Young (Canada) Inc., Morguard Corporation and Oxford Properties are the major companies operating in the Canada Office Real Estate Market.
What years does this Canada Office Real Estate Market cover?
The report covers the Canada Office Real Estate Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Canada Office Real Estate Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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Canada Office Real Estate Industry Report
Statistics for the 2025 Canada Office Real Estate market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Canada Office Real Estate analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
