•Employment on a three-month moving average fell in the London metropolitan area by a combined 27,300 jobs in April and May 2020. As a result, the unemployment rate rose to 11.7% and doubled from the 5.8% recorded just two months earlier in March 2020.
•London’s office market experienced an increase in vacancy this quarter as it expanded by 100 bps to 15.7%. Vacancy is expected to rise further throughout 2020 as COVID-19 continues to hamper demand and market activity.
•Overall net rental rates have declined for four consecutive quarters and currently sit at $13.18 per sq. ft., marking a year-over-year decrease of 6.5%. This downward trend has been influenced by declining rates within Class C space, whereas some recovery has been noted in Class A and B product, increasing quarter-over-quarter by 3.7% to $14.44 per sq. ft. and 5.6% to $13.17 per sq. ft., respectively.
The office market recorded 5,000 sq. ft. of negative net absorption this quarter, the lowest amount absorbed by the market since Q1 2019. London’s Core Class B product experienced the largest contraction with over 180,000 sq. ft. of negative net absorption this quarter
•The manufacturing industry is a key sector in London’s economy and similar to the rest of the province is expected to face pressures from the pandemic. Manufacturing sales in Ontario declined by 46.1% in the first two months of Q2 2020, but are forecast to improve as the province moves forward with reopening.
•Following a nominal quarterly decrease of 10 bps, the availability rate now stands at a record low of 2.2%. This is likely fueled by the continued lack of new supply with only 47,000 sq. ft. coming to the market this quarter.
•Although London’s industrial market recorded 94,000 sq. ft. of positive net absorption in Q2 2020, the volume of space absorbed has fallen over the past three quarters and is expected to decrease throughout the year.
•The average asking lease rate reached an all-time high of $5.79 per sq. ft. in the market, rising by 14.6% quarter-over-quarter. The average asking sale price has also experienced a slight recovery from previous quarters of decline, increasing by 7.0% quarter-over-quarter to $68.43 per sq. ft.