TD Centre office towers in Toronto as pictured on April, 17 2014.Fred Lum/The Globe and Mail
Toronto-Dominion Bank is looking for as much as 550,000 square feet (51,100 square meters) of office space in Toronto, following the lead of other lenders that have snapped up additional real estate in North America's fourth-largest city.
Canada's biggest bank is rethinking its office needs and studying various options, issuing a request for information on space available about six months ago, spokeswoman Alicia Johnston said in an interview. The bank, which has about 25,000 employees at about 20 corporate locations in and around Toronto, hasn't yet made any decisions on its plans.
"We regularly evaluate our real estate to ensure we're meeting business needs to be both cost effective and provide space that works for our employees," Johnston said.
Toronto-Dominion is studying the market as its peers, including Bank of Montreal and Canadian Imperial Bank of Commerce, have sought more space in Canada's financial hub. CIBC earlier this month unveiled plans to move to a new Toronto headquarters after about 90 years at its main office in the heart of the city's financial district, leasing 1.75 million square feet in a two-tower complex to be built a few blocks south from the bank's current location.
Royal Bank of Canada, the country's second-largest lender, expanded to two new office complexes – RBC Centre on Wellington Street West and RBC WaterPark Place near the downtown waterfront of Lake Ontario – in the past eight years. Toronto-Dominion's headquarters are at Toronto-Dominion Centre, which has six towers with 4.3 million square feet of space and more than 20,000 people working at its offices.
Low Vacancies Toronto, in the midst of a residential housing boom, had a first-quarter office vacancy rate of 4.6 per cent, the lowest of the big North American cities, according to CBRE Canada. Robust employment growth and a pool of millennial workers living nearby have fueled demand for office space in downtown Toronto. Developer Cadillac Fairview, the real estate arm of the Ontario Teachers' Pension Plan, is so confident about the market that it's beginning work on a C$479-million ($357-million) office tower even though it doesn't yet have a lead tenant for the 32-story building.
"When the vacancy rate is at this kind of level, it definitely becomes more difficult for tenants to find suitable available space," Cynthia Holmes, a professor of real estate management at Ryerson University in Toronto, said in an interview.