Bank of Nova Scotia vacating top floors of Toronto's Scotia Plaza skyscraper - The Globe and Mail

Bank of Nova Scotia will vacate the top floors in Scotia Plaza skyscraper in Toronto’s financial district, adding more prime office real estate on the market during the pandemic.

Scotia Plaza’s owners publicly announced that Scotiabank renewed part of its lease but that the bank would give up the top floors of the 68-storey office building.

The landlords, KingSett Capital and Alberta Investment Management Corporation, made the lease renewal announcement as numerous Bay street firms and other businesses have been putting some of their space on the sublet market.

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The increase in sublets has sent downtown Toronto’s office vacancy rate to 7.2 per cent in the fourth quarter from 2 per cent prepandemic, according to CBRE data.

Although Scotiabank is vacating the top floors in Scotia Plaza, the bank is taking space in a new building in the financial core. Brokers said it was expected that Scotiabank would shed space as it prepares for the move. Scotiabank and Aimco did not immediately respond to a request for comment.

“This was calculated and planned. I don’t think the pandemic was the final decision,” said Bill Argeropoulos, head of research with commercial real estate company Avison Young. “All of the banks have been looking at their footprints over the last several years,” he said.

It is unclear what the demand will be like for the top floors of Scotia Plaza. The red granite building, the second tallest skyscraper in the financial district, will be competing with a number of newer office towers. As well, this is occurring as other prominent downtown office tenants are trying to shed their space. That includes TMX Group, which operates the Toronto Stock Exchange, consultancy Mercer Canada and British-based Finastra, which owns a widely used mortgage-processing platform called Filogix.

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2021-02-08 15:27:06Z
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