Ottawa continues to trail other major Canadian cities in office occupancy: Colliers

Downtown Ottawa skyline

Ottawa’s return-to-office rate continues to lag behind other major Canadian cities even as the office vacancy rate declined slightly in the first three months of 2024, a new report says.

Citing data from research firm Environics Analytics, Colliers Canada said Tuesday that Ottawa’s office occupancy rate is currently at 54 per cent of pre-COVID levels.

That compares with 78 per cent in Toronto, 72 per cent in Vancouver and 67 per cent in Montreal.

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Colliers says the decline has been particularly acute in the downtown core, where office occupancy levels dropped to 43 per cent in the first quarter. That’s down from 73 per cent in the second quarter of 2023, just after the Treasury Board mandated most federal government workers to return to the office a minimum of two days a week.

Environics Analytics estimates the number of workers and days worked at offices in major Canadian cities based on publicly available data that tracks the movements of cellphone users. The agency compares the current data with similar information from 2019 to get a sense of how much office traffic in Canadian cities has changed since many office tenants shifted to remote and hybrid work during the pandemic.

Office occupancy in Ottawa has changed little in the past year despite the Treasury Board’s edict, rising just three percentage points from 51 per cent in the first quarter of 2023.

Meanwhile, Toronto’s occupancy rate has soared 26 percentage points from 52 per cent a year ago, and Vancouver’s rate has jumped nine points from 63 per cent last year.

Warren Wilkinson, senior managing director of Colliers’ Ottawa office, said that based on anecdotal evidence, he thinks some private-sector tenants are taking their cue for return-to-office strategies from the region’s largest employer.

“If that’s the idea, that (Ottawa is a) federal government town, our neighbours, our friends, our compatriots in the community aren’t taking their back-to-work (mandate) by the letter of the law, then sometimes private industry is like, ‘Well, maybe we don’t have to either,’” Wilkinson said Tuesday. 

“If that is an attitude that is pervasive across businesses in (downtown) Ottawa, then that’s why our occupancy is back to 43 per cent.”  

While Ottawa’s offices aren’t as full as those in some other big Canadian cities, the city’s overall office vacancy rate continues to fall.

Colliers said Ottawa’s vacancy rate sat at 12 per cent in the first quarter, down from 12.2 per cent in the fourth quarter of 2023 and 12.3 per cent a year earlier. 

In the downtown core, the vacancy rate was virtually unchanged from the last three months of 2023 at 11.2 per cent, while the suburban vacancy rate dropped to 12.6 per cent, down from 12.9 per cent in the previous quarter.

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