The face of Toronto’s financial district is getting a lift, as top firms and big banks move their business further south.
A Globe and Mail feature, published over the weekend, focused on this shift, identifying some of the big moves down to the city’s waterfront taking place including that of wealth management big wig CI Financial Corp, major insurer Sun Life Financial and the office of Healthcare of Ontario Pension Plan.
Furthermore, later this year, one of the Big Six – the Royal Bank of Canada – will transition more than 4,000 employees to the RBC WaterPark Place along Queen’s Quay, while tech giant Cisco Systems Inc. is investing $100 million into a global innovation hub with 15,000 sq. ft. of office space in the same property.
Even smaller firms, the Globe reported, have made the move, including independent advisory firm Stonegate Private Counsel, which moved to York and Bremner streets, just north of the waterfront, in 2010.
“We were still one of the few towers down here,” Mike Mallinos, Stonegate Private Counsel, told the Globe about his company’s offices in Maple Leaf Square. “But it’s been an amazing change in the last five years, there are more towers than I thought possible.”
So, beyond the glorious views in pristine towers, what is the attraction the area? Cost savings, for one. The new developments are more energy efficient, with lower maintenance costs and the ability to allow for more workers to occupy a smaller space.
What does this mean for Bay Street?
According to real estate analysts, some of whom predict a vacancy rate in office towers to hit 10 per cent by the end of next year, landlords are going to feel the pressure to do one of two things – lower their rent or renovate.
With the anticipated influx of people to the waterfront – expected to hit approximately 20,000 more office employees and 10,000 new residents – heavy development is underway. RBC Waterpark Place, Bremner Tower and One York Street are three buildings under construction that will add 2.4-million sq. ft. of office space to the area.
Meanwhile, with the revitalization of Queen’s Quay and Union Stations, the area will see better transit, more bike lanes, a pedestrian promenade, an extended PATH system and a $195-million hydro transformer.
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