Office vacancy rate could peak in 2024 as hybrid work models gain popularity: report

TORONTO –

A brand new report by Colliers Canada predicts the nationwide workplace emptiness charge may peak at roughly 15 per cent by the tip of 2024 because the rise of hybrid work fashions immediate corporations to cut back their workplace area.

It says workplace emptiness in Canada has risen from round eight to 14 per cent since 2020, however that determine is anticipated to fall in early 2025 barring a serious financial downturn over the following 18 months.

Economic progress is tempering emptiness progress, whilst hybrid work turns into extra fashionable, because of companies increasing and new corporations coming into the market.

Fifty-five per cent of corporations say they’ve finalized their strategy to balancing in-office and distant work, up from 49 per cent within the fourth quarter. Eighty-six per cent of tenants indicated they’re happy with their present hybrid preparations.

The report says the typical variety of days corporations are mandating staff to work on the workplace elevated from 2.5 in late 2022 to a few final quarter.

Colliers says business tenants are 10 proportion factors extra more likely to renew a lease for every further day their staff work on the workplace, with corporations almost definitely to maintain their present sq. footage of area if workers work in-office no less than 4 days per week.

This report by The Canadian Press was first printed Aug. 15, 2023.