Montréal and Québec - Office
Companies with a large footprint are in reflection mode. Many are expected to maintain full-time telework until the fall while some until the end of the year - this is also true in the Downtown Core market given the density of workplaces and the use of public transit by a substantial portion of employees. They continue to reflect on telework in the long term.
Many office space users are feeling pressure from their employees to return to normal activities and a desire to get back to the office. At the same time, we are also seeing that many employees appreciate the benefits of working from home: in any event, employers will be inclined to revise their teleworking policies in the coming months to retain talent.
Montréal Downtown Core
A few tenants are at risk, but generally speaking, the market remains healthy at this stage.
Many technological and entertainment companies are realizing that they can work remotely and we expect an increase in sub-leasing. However, given the limited availability of products prior to the crisis, this sub-market should remain relatively stable.
Even though the health crisis has affected the metropolis more significantly, the level of economic activity in Montreal's suburban markets (South Shore, North Shore and Laval) has decelerated for the time being. We can expect these markets to experience increased demand for satellite offices and the vacancy rate for this type of asset will be further compressed in the coming quarters.
Nonetheless, it is very likely that many small companies in difficulty will opt for teleworking in the coming months.
A significant number of space users have opted for short-term renewals (12-24 months) without reviewing their space requirements. In cases where tenants make longer-term commitments, these are usually accompanied by the review of their space requirements and a downward revision of their space requirements. Transactions already under construction have maintained the pace since recovery.
The level of economic activity is on the rise and a wind of positivism in the Québec City market's business community is apparent following the retail deconfinement measures initiated on May 4, 2020.