Midwestern Ontario’s office market started 2020 with 102,891 sq. ft. of positive net absorption. As a result, the vacancy rate fell 60 bps to 9.7% quarter-over-quarter. On a city level, Guelph holds the lowest vacancy rate at 3.2%, a record low for the city, meanwhile Cambridge has the highest vacancy rate in the Region at 13.4%.
Waterloo Region’s net rental rate and additional rents continue to rise, settling at $13.76 and $10.32 per sq. ft this quarter. Guelph rents climbed above the $15.00 per sq. ft. marker for the first time to $15.80 per sq. ft., the highest in the Region.
In order to keep up with demand, Waterloo Region is expected to bring 292,588 sq. ft. of new supply to the market by the end of 2020. 345 King Street West in Kitchener’s Innovation District is currently the largest building under construction and is 40.0% pre-leased.
Waterloo’s Idea Quarter and Research & Development submarket has the highest vacancy rate in the city at 13.9% and yet also boasts the second highest net rental rate at $14.92 sq. ft. The district is rapidly growing with 234,558 sq. ft. of planned and active construction projects.