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Canadian office vacancy rates fall, Calgary most active

Aerial photography of Calgary, Alberta showing the downtown core looking west.

Chris Bolin/The Globe and Mail

A still-challenging economy from mid-2011 to mid-2012 doesn't appear to have hurt the corporate real estate market in most of Canada's major cities, says a new report.

Office vacancy rates in that period fell significantly in Montreal, Toronto, Calgary, Edmonton, Winnipeg and Vancouver, according to Newmark Knight Frank Devencore's national office market report for 2012.

Only Ottawa and Halifax saw a rise in vacancy rates, though in the case of the latter the increase was almost entirely due to new inventory on the market, the study says.

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The overall national vacancy rate from the end of the second quarter of 2011 to the end of the second quarter of 2012 fell to 4.5 per cent from 5.4 per cent, the report indicates.

Close to 6 million square feet was absorbed over the past 12 months, says the analysis, which is based on occupancy rates in 970 Class A and Class B office buildings across Canada.

Calgary's office market – fuelled by the post-recession growth cycle in the oil and gas sectors – was the most active in the past year, with over 1.6 million square feet of space absorbed and vacancy rates in the downtown sector's top-tier buildings at just 1 per cent, the study found.

Toronto's downtown office market was also very active, with combined Class A and B vacancy rates at 4.5 per cent at the end of the second quarter of 2012, down from 5.3 per cent a year earlier, say the report's findings.

In Vancouver, the Class A vacancy rate is 1.5 per cent, says the survey. The Class A and B combined vacancy rate was 2.2 per cent.

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