Reviewing Canadian Commercial Spaces & Modern Workplaces

The Office Spaces

Globalization, technological advancements, and many other changes in the past few decades have changed the way we work. It thus comes as no surprise that the office space sector has witnessed the following changes:

From Traditional Offices to Activity-Based Working

In previous office setups, organizations used about 80% of their space on workstations and allocated the rest to support and collaboration. Back then, maximizing desk space was necessary to ensure that all employees had a fixed desk where they could engage in productive work on behalf of the organization. But now, most organizations no longer need as many workstations as they did before, as many of them have embraced hybrid work models. Under these models, employees work on alternate days, thus resulting in reduced desk usage. In fact, trends show that most organizations now aim for about 60 to 70 desks per 100 employees, and this figure is expected to keep dwindling as more organizations downsize to take advantage of hybrid work opportunities.

So, how have organizations used the extra desk space? They are now maximizing the collaborative and support spaces. In most offices, you will find that the organizations have carved out focus areas, such as library zones, where the employees can engage in focused work. On top of these, they create collaboration hubs where employees can work together on projects.

Has this changed the demand for office space? To a degree, most organizations have chosen to downsize, and startups are also taking up much less space than they would have before hybrid work models became the norm. Even so, this drop in demand has been accompanied by an increase in the cost of interior fittings. Most organizations are now investing more money and time in their office spaces to ensure that they are maximizing on the collaborative spaces – this includes high-speed networks, specialized furniture, and advanced technologies. As such, landlords are securing higher-quality leases in lieu of the decline in office space demand.

From B/C to Trophy/Class A Buildings

With hybrid work models taking over, the national office vacancy rate in Canada has risen. However, the vacancy rate differs from one building class to another. While B/C buildings have suffered a significant loss in demand over the years, class A buildings have witnessed a rise in demand. Current trends show that the vacancy rates in B/C buildings can be as much as 2 to 2.5 times higher than those in A buildings. But why is this?

Well, there are two main reasons behind this:

a. The demand for more amenities. As more organizations seek to make the most out of their offices, both in terms of workstations and collaborative spaces, they have gravitated towards the buildings that offer them more features. Most organizations want sophistication, not just in their HVAC systems but also in their technologies, as this improves the well-being of their employees and also justifies the office space costs to their investors. So, they are willing to pay more money to secure a space in a building that goes beyond the basics.

b. The limited supply of new builds. Many commercial Canadian real estate markets have seen a decrease in office construction in the past two decades. While many investors are hard at work putting up new buildings, such developments take time, especially at a time when people want mixed-use developments. For this reason, existing new builds are limited in supply, which has allowed their landlords to fetch premium rents on their properties.

Naturally, these changes have spurred an increase in office renovations and builds to meet this growing demand in the market.

From Individual to Shared Workspaces

Shared workspaces are designed like typical offices, complete with workstations, social spaces, and more. But unlike the standard office spaces where all the people working in the office are under one organization, shared workspaces allow people from different organizations to book a workstation for a given period. As such, while people in the office may share amenities, they do not necessarily work for the same organization.

These innovative spaces were once considered the go-to for startups that did not have the capital to secure their own offices. But now, this concept has become widely accepted in the Canadian market, so much so that it is now valued at over a billion dollars. Why is that?

It is all about the cost. Think about it like this. If an organization leases or buys an office, it puts up a lot of money, not just on the lease or purchase but also on fitting the space. Moreover, the repair and maintenance costs fall on it. But with a shared workspace, individuals as well as organizations only need to pay a monthly service fee, which makes it much cheaper. It is no wonder that even tech firms and banks are relying on these workspaces to cut back on their costs – they will happily lease a premium downtown office for their headquarters while renting workstations for employees who do not necessarily need to be in the office.

The Retail Spaces

At a time when many people love shopping online for the convenience, has the retail sector suffered? Let’s take a look at the two top trends in this digital age.