The vacancy rate climbed to 7.5 per cent at the end of 2012, the report said – an increase of 0.4 percentage points when compared to the same time a year earlier.
The Ottawa office market was the victim of “lacklustre” demand throughout the year, a trend Cushman & Wakefield said it expects will continue into 2013.
“There is no evidence to suggest that these market conditions are going to drastically change,” the report stated.
That will be combined with more availability as the year goes on, the firm notes. The federal government, one of the biggest users of office space in the capital, will leave 110,000 square feet of space vacant when it leaves 123 Slater Street later this year.
The long-term health of the market will mostly depend on what the government does with its office space as it attempts to cut spending, the report notes.
Cushman & Wakefield predicts that vacancy “could” go as high as 8.6 per cent.