London Inc. Weekly

Weekly Regional Business Intelligence

Written by Kieran Delamont, Associate Editor, London Inc.

London leads nation in downtown office vacancy: CBRE

Well, we’ve achieved number one status, but there’s nothing to celebrate here. London’s ailing downtown office market took top spot nationwide for its vacancy rate in CBRE’s Q3 report on Canadian office market activity, released earlier this week. London’s downtown vacancy rate now stands at 31.4 per cent – a record, beating out Q2’s vacancy rate of 30.6, and leading Calgary, which had the second highest vacancy rate at 29.6 per cent. It is yet another indicator of the challenge that downtown London faces in its process of renewal. “The province and the city need to do more around social issues that every city is facing,” Greg Harris, CBRE associate vice-president, told The London Free Press. Harris noted the increased vacancy rate isn’t about companies fleeing the core, but rather lots of small right-sizings that are adding up to more vacancies. “There’s no magic bullet. The slight bump-up is a function of leases coming up, and companies are now right-sizing. There’s no major event. It’s what’s been happening in recent years.” He did add that CBRE had seen “an increase in activity in London in September,” and that among those shopping for office space, “downtown is being looked at, but it’s a process.”

The upshot: For all the doom and gloom downtown, there’s much sunnier news out in the suburbs, where London’s office market is one of the tightest in the country. In the ‘burbs, the vacancy rate has dropped to 9.3 per cent ― far lower than the national average vacancy rate of 17.3 per cent. That trend is being kept in mind as the city works through its downtown master plan over the next year or two. “Lots of things have changed since Covid, so we now have to rethink what downtown may look like,” said Downtown London’s Barbara Maly. “We need to be intentional. How do we quantify success? We really don’t have those metrics laid out.”

Read more: CBRE | London Free Press

Frustrations reach boiling point for OEV business owners

Tensions are starting to boil over between businesses in Old East Village (OEV) and the Ark Aid Street Mission, even as the shelter and the BIA are trying to work together in a renewed way to tackle social issues in the area. Early in the week, OEV BIA general manager Kevin Morrison expressed concern about Ark Aid’s request for year-round funding, saying they weren’t doing enough to deal with issues of open drug use and crime. By Tuesday, the two sides were apparently unified, saying they wanted to “work together and come up with solutions that are going to be good for everybody.” But by Wednesday ― at a pair of town hall-style meetings ostensibly meant to discuss The Ark’s request for $4.3 million in annual funding ― things got rocky again, as a public meeting turned into a bit of an airing of grievances among business owners and residents. Business owners are increasingly frustrated with the state of Dundas Street, frustrated with The Ark, which they say isn’t doing enough to deter crime and deal with cleanup, and frustrated with the city, which they say isn’t listening to them. “This is ridiculous,” said Tara Davies, owner of coffee house Dough EV. “The police are here, but I can’t get help from them. I call them, they’re too busy. I am now a social worker outside my own store. I didn’t sign up for that.”

The upshot: Tensions between the two camps, such as those that showed up at Wednesday’s meetings, are becoming a core dynamic facing urban business districts across the country ― and there are precious few (if any) examples of cities able to find a resolution that makes everyone happy. Sarah Campbell, The Ark’s executive director, said she understands this. She said they are open to offering shelter services elsewhere, but haven’t been able to find locations willing to take them in. “We’ve been hearing a lot of frustration with the visible homelessness and the struggles of what happens in the neighborhood here in Old East Village,” she said, adding that she wanted people to get an opportunity to air their concerns. “Their experience is very real.” City politicians will be considering the $4.3-million-per-year request from the Ark as part of their upcoming 2025 budget deliberations.

Read more: CTV News London | CBC News London

London Bicycle Café launches Bikes for Business pilot program

The London Bicycle Café has launched Bikes for Business ― a pilot program that allows businesses to access a fleet of e-bikes for delivery and commuting free of charge, with the aim of demonstrating the potential to commute or deliver on a e-bike and avoid driving, parking and core-area vehicle traffic. “Local businesses and organizations can explore how e-bike-based transportation can augment or replace traditional carbon-based delivery and commuting methods,” a press release explained, adding that both 519 Pursuit and Meals on Wheels have been early participants in the program. “We believe the future of business transportation is sustainable,” said Andrew McClenaghan, co-owner of the London Bicycle Café. “This program offers local businesses and organizations the chance to explore e-bikes as a viable, eco-friendly transportation solution.” The program is being funded by a Desdjardins GoodSpark Grant, as well as through the support of Northern Commerce.

The upshot: The program announcement comes on the heels of the London Bicycle Café being named Small Business of the Year at the London Chamber’s Business Achievement Awards, and few evangelize for e-bikes in this city as much as McClenaghan ― recall that he gave each of his staff a $5,000 e-bike as a thank you after he sold Digital Echidna to Northern Commerce in 2022, and he is now spearheading this pilot program. Early reviews have been positive: “After the pilot, I can see how bikes really could bring a lot of positive change for the organization,” said Meals on Wheels executive director Chad Callander (pictured). “Not to mention, cost savings and a new demographic of volunteers.” The London Bicycle Café is taking on the job of maintenance and storage of e-bikes used in the program, and for businesses wanting to purchase, the café offers financing and service packages.

Read more: London Chamber | CBC News London

September numbers deliver sliver of optimism to area realtors

The London and St. Thomas Association of Realtors (LSTAR) released data for home sales in the month of September this week, and the numbers delivered a tinge of optimism as the industry heads into the fall market. According to LSTAR, a total of 562 homes exchanged hands in the region (the LSTAR catchment area also takes in Strathroy, St. Thomas and portions of Middlesex and Elgin counties), an increase of six per cent from the same period last year. The average home price was $641,583, reflecting a 1.7 per cent increase from September 2023 and a bounce back from the $629,259 average home resale price recorded in August of this year (as a point of further reference, the average sale price in July of this year was $654,593). On the supply side, home choice continues to climb with 1,569 new listings coming to market in September. In total, LSTAR recorded 2,049 active listings in September, an increase of 19.8 per cent from the same time last year.

The upshot: As London Inc. real estate analyst Marcus Plowright noted in his On the House column this week, the London-area real estate market really has “no where to go but up after an extremely slow summer.” With much of the September activity concentrated in the latter half of the month, the sector is hoping the momentum continues and, in turn, begins to lure back prospective homebuyers who have remained firmly on the sidelines despite lowering interest rates. “We saw some positive signs in September’s market as well as our year-to-date activity showing modest increases,” commented LSTAR board chair Kathy Amess. “The Bank of Canada rate decrease in early September was a welcome adjustment that may have been a factor, and we hope this trend continues throughout the fall.”