Montreal office, retail vacancies kept rising in Q4
UDI head feels picture is ‘bound to improve’
MONTREAL • Some of downtown Montreal’s key economic indicators are heading in the wrong direction.
Office and retail vacancies in the city’s central core continued to climb in the fourth quarter of 2020, according to a quarterly report released Thursday by the urban development Institute of Quebec and the Montréal Centre-ville merchants association. The report, whose first edition was published in October, aims to paint a socio-economic picture of the downtown area.
The survey also found office space available for sublet had increased during the fourth quarter, which may foreshadow even more vacancies when leases expire. On the residential front, condo sales fell as new listings soared — a sign the downtown area may be losing some of its appeal.
“It’s impossible not to be preoccupied by the rapid increase in office vacancies,” Jean-marc Fournier, the former Quebec politician who now heads the udi, said Thursday in an interview.
Still, with COVID-19 vaccinations set to accelerate in the coming months, “the economic picture is bound to improve,” he said. “People will start returning downtown. It’s much too early to say the office market is going to disappear.”
Public-health measures implemented since the start of the pandemic almost a year ago — such as caps on office capacity — have deprived downtown Montreal
of more than 500,000 workers and students. A mere 4,163 university and CEGEP students attended in-person classes in the second quarter, the most recent period for which figures are available. border closures and travel restrictions have brought tourism to a standstill, hurting hotels and thousands of local businesses.
Seventy per cent of downtown workers carried out their professional activities at home more than three days a week during the fourth quarter, the report said, citing a recent online survey of 1,000 Montreal-area residents.
Two-thirds of respondents wanted to continue teleworking most of the time after the pandemic, the survey also found. That’s down from 76 per cent six months ago, which may indicate that remote work’s appeal is waning somewhat. Half of respondents said telecommuting has made labour relations more difficult.
“There’s a certain fatigue with respect to teleworking,” Fournier said. “That’s why we think you’ll see hybrid models in the future.”
Some 12.4 per cent of downtown offices were vacant in the fourth quarter, the data show. That’s up from 11.5 per cent in the third quarter and 9.8 per cent three months earlier.
Overall, more than 60,000 square feet of office space now sit unoccupied.