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How the boom in technology jobs is transforming Toronto and Vancouver’s office markets

How the boom in technology jobs is transforming Toronto and Vancouver’s office markets

Posted by PanamericanWorld on September 05, 2015

Canada’s booming technology industry has been acknowledged by a U.S. real estate firm which has for the first time placed Toronto and Vancouver among its top cities in North America for job growth in the sector.

The two cities made it on a list CBRE calls its Tech Thirty, an analysis of the top 30 technology centres in North America that shows how tech workers have kept office markets humming.

“If you look at the tech job growth rate (in Canada) it is well above overall employment. The point is that tech employment is growing substantially faster than overall employment. It’s tech, all tech now,” said Ross Moore, director of research for CBRE’s operations in Canada. “We’ve got our fingers crossed.”

Moore said Toronto had the fifth most tech jobs of any city on the Tech 30 list while Vancouver came in at 20.

“It’s the first time we’ve been included,” said Moore, indicating it’s a nod for the strength of the sector. “When the authors started this year’s report I think it was like ‘yeah, we need to include Toronto and Vancouver’.”

Some leading companies have settled in the Toronto area, including Facebook Inc. which directly rented 25,000 square feet of space in the first quarter of 2015. Rangle.io Inc. also sublet 29,172 square feet in Toronto’s red hot technology hub in the downtown west end, during the first quarter of this year.

Toronto is now only behind Washington D.C. Seattle, Silicon Valley and Boston when it comes to tech jobs, which are described as data processing, software publishers and computer system design.

Vancouver is also having its share of growth with Amazon Inc. recently announcing a deal for 150,000 square feet and Microsoft Inc. 143,000 square foot in the downtown core.

“If you look at the tech job growth rate (in Canada) it is well above overall employment. The point is that tech employment is growing substantially faster than overall employment. It’s tech, all tech now,” said Moore, about the sector sustaining the Canadian office market. “We’ve got our fingers crossed.”

CBRE says high-tech is rapidly transforming the officer market across North America. It made up 19 per cent of all leasing activity in 2014, a jump from 14 per cent in 2013. Through the first quarter of 2015, the share of leasing from tech had jumped to 20 per cent.

“This sector is projected to remain the strongest source of demand for office space through 2015,” said the report.

The impact is being felt on rental rates too. The real estate company reports that rental rates grew by 10 per cent between the second quarter of 2013 and the second quarter of 2015, in 16 of its top 30 tech markets.

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