TORONTO - Real estate services firm Cushman & Wakefield forecasts a general slowing of demand for office space in Canada in early 2012 but expects tighter supplies and higher prices in the latter half of the year.
"As the number of deals in progress slows, driven by uncertain global economic news and the related fall in business and consumer confidence, the capacity to meet demand for new space in most major markets will create a serious shortage of central inventory in the second half of 2012 and beyond," Pierre Bergevin, president and CEO of C&W Canada, said in a release.
"Moreover, the resulting effect of shrinking inventory will see some central markets across the country continuing to show declining vacancy rates, which undoubtedly will result in an increase in net effective rents."
By the end of 2012, Calgary should be the tightest market in the country, with class A vacancy scraping the bottom of the barrel at 1.2 per cent.
Vancouver will be close behind with a new low of about 1.9 per cent, while central Toronto will see some softening due to inventory returning to market as scheduled development projects are completed.
"Montreal has impressed all observers as its class A vacancy has dropped significantly," the Cushman & Wakefield release said.
The company said demand in Halifax should increase in each quarter in 2012, largely due to confidence bolstered by the $25-billion contract won by Irving Shipbuilding to build combat vessels for the navy over the next 20 years.
C&W is the world's largest privately held commercial real estate services firm, with 234 offices in 61 countries and more than 13,000 employees.
