CALGARY — Demand for high-quality commercial office space continues to outpace supply in Calgary, says a report released Thursday by TD Economics.
The report said the trend will persist into 2013 as there are only a handful of office projects currently under construction in the city.
It said about 40 per cent of the world’s publicly-traded energy companies have their headquarters set up in Calgary and about two-thirds of the downtown office space is occupied by energy firms.
“With crude oil prices staying firm throughout much of last year, all property classes recorded an improvement in conditions and higher transaction volumes,” said TD Economics. “Each class was also benefiting from the cyclical rebound in economic and employment growth that ensued following the recession.”
It said lower office vacancy trends have been noted at a time when absorption in square feet comes in close to two million on an annual basis. There has also been a shift to quality – at the end of 2011, the vacancy rate for Class AAA properties sat at just 0.2 per cent.
“Calgary has created 44,000 net new jobs since January 2010, one of the best employment showings in Canada,” said the report. “The labour climate serves as a good indicator of office demand and helps explain why levels are robust.”