Waterloo Region’s office market saw vacancy increase by 60 bps to 6.9% this quarter. Simultaneously, sublease availabilities decreased by more than half to 26,000 sq. ft. and now represents 2.4% of all vacant space. This indicates a shift toward shorter-term lease agreements as companies adapt to new working conditions in phase three of reopening.
Since the start of 2020 the market has recorded 299,000 sq. ft. of positive net absorption. New supply of office space continues to be leased as it is completed, supporting the continual growth of the local economy.
The development pipeline remains active in the Region with 315,000 sq. ft. of office product under construction, of which 205,000 sq. ft. is expected to be completed by the end of Q4 2020. The remaining 110,000 sq. ft. from 345 King West is expected to be available in early 2021 and is already 40.0% pre-leased.
In addition to construction currently underway, there is 580,000 sq. ft. of planned construction. Given Waterloo’s Region’s growing technology sector, this planned construction will help satisfy the expected demand for office space.