Collaborative work spaces are the office revolutionary trend, says Colliers International’s Waterloo Region Market Outlook Report
Waterloo Employers have recognized the corporate value of collaborative work spaces and are calling employees back into the office, according to Colliers International’s seventh annual Waterloo Region Market Report.
“We are seeing what we term a revolution, in that office space is now being used very differently from previous years,” said Karl Innanen, Colliers International’s Waterloo Region Managing Director. “In the past, many employees worked offsite from their homes, their cars or coffee shops. Now, employers see the value in creating a corporate culture within their office space, where conversation and interpersonal exchange spark ideas, innovation and a collaborative engagement, which all lead to greater effectiveness and efficiency in daily work.”
The Colliers Waterloo Region Office Report shows that employers are using creative amenities within the workplace, such as games rooms and open meeting spaces, to engage employees. Colliers also notes that unique spaces such as renovated and exposed brick and beam buildings are now the most attractive type of office space, especially for creative agencies and technology-focused companies.
Innanen said that Colliers was involved in the transaction that saw Google Canada open its largest Canadian office in the Waterloo Region, pointing to the depth of innovative talent in the area and its very reasonable cost of living, relative to other Southern Ontario urban areas.
The Colliers report also covers the industrial market, providing comparison figures between 2010 and 2015 in terms of vacancy rate, availability of space and average deal sizes.
The industrial vacancy rate has risen slightly in the last five years, standing at 6.82 per cent in 2015 versus 6.70 per cent in 2010, while the availability rate has dropped from 6.86 per cent in 2010 to just 5.46 per cent last year. Industrial deal sizes have grown since 2010, when the average deal size was 35,626 square feet, to an average deal size of 40,645 square feet in 2015. The average industrial deal size in the past five years has been 38,225 square feet.
The Colliers industrial report highlights the continuing strength of the Waterloo Region investment market. While 2014 was a record year that saw approximately $1 billion in investment sales, an amount dramatically above the $650 million in sales in an average year, 2015 showed little slowing, seeing approximately $900 million in investment sales for the second best year ever. This result again points to the strength of the market for investment dollars.
Colliers International indicate that demand is continuing to outstrip supply in Waterloo Region, with far more buyers than sellers in the investment marketplace.
“Of this $900 million, fully one-third of these sales were multi-unit apartment buildings,” said Innanen. “Most notably, the Waterloo Region is becoming a ‘vertical city’ that is growing up, rather than spreading out. We are seeing many more high-rise rental apartments and condominiums being planned and constructed. We also know the new Light Rapid Transit in the Region will assist greatly, as investors have seen past the inconvenience of the current construction period and now very clearly see the eventual long-term benefits the LRT will bring to the Region,” he added.