Downtown Montreal is slowly recovering from the pandemic that hit it hard. If the rebound in tourism, the return of students to class and the gradual return of workers to the office are helping to revive the city center and its businesses, the recovery is however far from over, according to the latest report. The state of the city center.
In their latest report on the level of economic health of the metropolis, the Urban Development Institute of Quebec and Montreal Center-ville note that, despite the high vaccination rate and the entry into force of the vaccination passport, the fourth wave of COVID-19 associated with the Delta variant limited the expected recovery.
What future for office towers?
It’s still hard to imagine a return to the prepandemic era in office towers. The supply availability rate in these buildings climbed to more than 14% in the third quarter of this year, compared to 11.5% in the same period in 2020, and to almost 10% in 2019.
The balance sheet, however, reserves some surprises at the level of new commercial leases. “We really expected an exodus, but it did not happen, on the contrary. Several companies that were outside the city center signed leases to establish themselves there. We are pleasantly surprised, ”underlines Glenn Castanheira, General Manager of Montreal Center-Ville, who believes that this bears witness to the city’s capacity to attract, even in troubled times.
“But we should not wear rose-colored glasses, the situation is fragile,” insists Mr. Castanheira.
The uncertainty in the economic environment is reflected in particular in the reduction in the size and duration of leases signed by companies. While companies typically sign long-term leases to ensure predictability of their fixed costs, the vast majority of renewals (84%) have been for terms of two to five years, according to the report.
Mostly cloudy
However, certain elements remain promising for the economic recovery of the city center, such as the quiet return of workers.
“Even if Public Health has postponed the return to the office and the instruction is still to avoid working in the office, we are surprised to see that more than half of the workers have returned. [que ce soit à temps plein ou en mode hybride]. It’s encouraging ”, illustrates Glenn Castanheira.
On the tourism side too, activity is picking up. Last August, the occupancy rate of hotels in the metropolis climbed to 45%, compared to 16% at the same date last year – even if we are still far from the rate of 88% in August. 2019.
There is nothing to be optimistic about, believes Mr Castanheira. “We expect the city center to recover from 2022 if the trend continues from a health point of view, and we hope to reach our new normal in 2023,” he concludes.