As the tech industry in Canada continues to grow and expand, it is having a large impact on the commercial real estate market.

It’s seeing its largest growth in Vancouver, Toronto, Kitchener-Cambridge-Waterloo, and Montreal. The booming tech industry has led to an even greater demand for office space as vacancy rates continue to decline.

Office Leases on the Rise 

While it only represents 2.8% of all employment in the country, or 503,000 workers, we expect this to continue to grow. As of the second half of 2016, tech companies signed 15.8% of leases for offices of 20,000 square feet or more.

Toronto Leads the Way

Toronto is the leader in Canada for tech employment with 155,733 jobs. This is one of the reasons that office space is hard to come by in the downtown area especially brick and beam offices that appeal to start ups. With the demand not slowing down, it’s likely we will see an increased construction for office space in the city.

Watch out for Waterloo

As downtown office space continues to become a challenge, will companies move to the tech hub of Waterloo?

The area has a smaller tech workforce of 16,870, but has the highest share of tech employees in Canada at 5.9% of total employment vs. 4.6% in Toronto.

The tech focus of the University of Waterloo has attracted start ups over the years such as Electronic Arts, Shopify and Blackberry.

With office space in Toronto being limited and pricey, Waterloo becomes a viable option for tech start ups.

Low Costs in Montreal

Montreal is the second largest tech employer with 87,433 jobs and continues to offer the lowest operating costs in the software development industry.

Will companies look to Montreal as an option to reduce overhead when it comes to real estate? This is a trend to keep an eye on.