Canada’s commercial real estate sector is bracing for a shift in demand from the financial services sector as the rising importance of technology and compliance alters firms’ office space requirements, according to a new report from real estate investment firms GWL Realty Advisors and CBRE Ltd.
Specifically, the rise of fintech is impacting financial service firms’ real estate needs as they are increasingly emulating tech companies, the report suggests.
“In the digital era, banks, insurance firms and wealth managers are all set to look, feel and act more like technology firms,” says Ray Wong, CBRE’s head of research in Canada, in a statement.
As financial services firms try to compete with technology companies for talent, Wong says, “This will cause financial services firms to increasingly invest in workplace strategies to create office spaces that are flexible, focused on collaboration, sustainability and health and wellness.”
At the same time, the report predicts that Toronto’s importance within the Canadian financial sector is set to grow even further, forecasting that an additional 10,000 financial services jobs will be added in Toronto by 2020.
“Over the past 15 years, Toronto has accounted for more than half of all financial services job growth in Canada,” the report notes. “Centralization of head office employment, a clustering of financial technology activity and new risk management and compliance functions has been driving this trend.”
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