Q2 2023 Ottawa Office Market Report

The Ottawa office market is struggling with demand as the sector waits for occupiers to determine their plans for hybrid work models. The result is likely weaker leasing fundaments compared to historic trends. Older, less amenitized buildings will suffer the most as wider trends to newer spaces/buildings that offer amenities that employers are looking for in order to incentivize workers back to the office.

In December, the Federal government announced a return-to-office for civil servants, with public sector employees expected to work a minimum of 2 to 3 days week in the office. Compared to other Canadian office markets. Availability sits at just over 7 percent, compared to more than 12 percent nationally. Additionally, the construction pipeline is limited, meaning additional new inventory will not upset current market fundamentals.

Looking forward, the office market is bracing for further reductions in office utilization as the Federal government considers effective space usage. However, these reductions will likely be phased over a period of years, softening the blow to the market.

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