Demand for newer office space will remain strong across Canada, says a new Altus Group report.

But office investors and developers have adopted a pens-down approach to new development agreements due to Canada’s economic slowdown and rising uncertainty, adds the Toronto-based commercial real estate intelligence firm.

Landlords and businesses have responded to the increasing hybrid work trend by optimizing office space and human resources to reduce expenses.

“The hybrid work model has cemented itself as a preferred work arrangement, as the share of workers with hybrid arrangements has more than tripled since the start of the pandemic,” states the report.

In the first quarter of 2O24, five office buildings were completed across Canada. Toronto led the way with just two completed projects comprising 1.4 million square feet. Meanwhile, 50 office projects totalling 8.1 msf were under construction nationally.

The national availability rate stabilized at 17.5%. Quebec City posted the lowest rate at 11.9%, followed by Vancouver (12.4%) and Ottawa (13.8%). Calgary (23.2%) continued to record the highest availability level.

Jennifer Nhieu, an Altus senior research analyst, and Ray Wong, the firm’s vice-president of data solutions delivery, authored the report.

Pictured: The Stack, a downtown Vancouver office building that opened in December 2023

Photo: Oxtord Properties