“In the Greater Toronto Area the government wants to decrease the real estate footprint by reducing the space requirement from 250 square feet to 200square feet per employee.” TD Economics
The Greater Toronto Area (GTA) does not require any introduction. It is one of the most populous metropolitan areas of the country and attracts a great number of immigrants from foreign lands on daily basis. Moreover, the big corporates also establish their head offices in this region, as it helps them in controlling and monitoring rest of the province and country with ease.
Target on its launch also planned to open eleven of its store chains in the GTA region, out of which three are up and running. This eyeing of Target is representative of the fact that GTA is a big market and it is experiencing a boom in terms of growth and prosperity. Consequently, the commercial real estate market of Toronto is also to witness a boom.
The question that commercial real estate investors might ask is; if the office space requirement is planned to go down, how can it be good news for them? The question is quite valid, however, the expert real estate analysts would know that a decrease in office space requirement is actually an increase in overall commercial real estate demand.
A decrease in office space requirements means that businesses are moving towards efficient utilization of their space. So, if one business utilizes the space efficiently, it means that more space is available for other businesses, hence, this efficient utilization of space allows more businesses to move towards the downtown area causing a spike in the demand of office space.
Businesses will make their employees utilize and share the same space for work, which was not possible in earlier days of separate space requirement. In addition to businesses moving towards efficient utilization of their office space, the trend of other businesses sharing the space with each other is also increasing. Thus, more and more businesses will be moving into the downtown area of Toronto.
The establishment of new offices is not the only good thing that will spur out of decrease in office space requirements, rather, it will also complement in the rise of demand of condos as well. The people that moving to Toronto to find jobs in these newly established offices will also require place for living, thus, causing a boost in the commercial condo requirement in the city.
Pertaining to the increase in commercial real estate, the trend is moving towards buildings that have retail spaces on the ground floor and condos on the upper floors. This type of building development is beneficial for offices and the employees that work in those offices, allowing them to cut down the need for commute.
In short, decrease in office space requirement is a win-win situation where offices have lesser space to manage and pay for, while the commercial real estate witnesses a boom because of more space being available for businesses.