A recent Chamber of Commerce poll found that 76 per cent of workers want to work from home either full time or part time once the health crisis is over.
More than one downtown office in five could become empty over the coming years as so-called hydrid models take root and employers look to shrink their real-estate footprint, a new report says.
Vacancy rates downtown could eventually rise to 21 per cent from 15.8 per cent now as a result of the pandemic, according to a report commissioned by the Chamber of Commerce of Metropolitan Montreal that was released Friday morning. Those additional vacancies would free up 11.4 million square feet of space — about 11 times the capacity of Place Ville Marie.
Like other major business hubs around the globe, downtown Montreal has seen business and foot traffic plummet over the last two years as governments and companies kept workers home to reduce contagion risks. In the spring of 2020, just before the start of the pandemic, average office vacancy rates in Greater Montreal were 10.8 per cent. Downtown, the rate was 8.8 per cent.
Most experts agree hybrid work will outlive the pandemic. A recent Chamber of Commerce poll found that 76 per cent of workers want to work from home either full time or part time once the health crisis is over. Hybrid models will cut the number of employees present in downtown Montreal by 19 per cent to 25 per cent, according to the Chamber of Commerce.
With about 55 million square feet of commercial real estate, Montreal boasts the second-largest concentration of business office space in Canada. About seven per cent of downtown office leases expire every year, the report estimates.
A drop in the value of downtown business properties would trigger major revenue shortfalls for the City of Montreal. Downtown generates about one-third of Montreal’s non-residential property taxes.
Downtown Montreal is home to some 300,000 employees and 11,000 businesses, including 26 companies that are headquartered there and have annual revenue of more than $1 billion. Some 700 subsidiaries of foreign companies have offices in the area.
This report will be updated.
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