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Office Strategy OFFICE STRATEGY PREPARED FOR: CITY OF BRAMPTON REGION O FPEEL CUSHMAN & WAKEFIELD 1 May 4, 2016 Ms. Claudia LaRota Policy Planner Planning and Infrastructure Services City of Brampton 2 Wellington Street West Brampton, Ontario L6Y 4R2 Regarding: Office Strategy Dear Claudia, Cushman & Wakefield has collaborated with The Planning Partnership and Real Estate Search Corporation to provide this Office Strategy report on behalf of the City of Brampton. From a real estate perspective, this report is intended to provide an overview of the local and regional office market; consider the achievable share of office space growth in the future; and review the characteristics of Brampton’s established office concentrations and future development sites. The report also provides an analysis and recommendations regarding planning policy to encourage office development. Finally, an office strategy with an implementation plan and performance measures are provided. We are grateful for the assistance of City staff on this project – in particular in the provision of data and mapping to support our analysis. If you have any questions, please contact the undersigned. Respectfully submitted, Cushman & Wakefield Ltd. Andrew Browning Vice President Valuation & Advisory [email protected] 416 359 2510 CITY OF BRAMPTON CUSHMAN & WAKEFIELD CITY OF BRAMPTON – OFFICE STRATEGY EXECUTIVE SUMMARY Market Perspectives The City of Brampton seeks to be the preferred GTA Northwest location of choice for office development. As part of its Municipal Comprehensive Review process, the need for an Office Strategy Study was identified. The City needs to establish and implement policies to attract and retain office employment. The main goal of this Office Strategy is to provide strategic policy directions to support the development of the office sector in the city. This Office Strategy is primarily focused on conventional major office buildings (those greater than 20,000 sf) for which Brampton competes with other municipalities across the region to attract – as distinct from public sector office uses, or professional/medical-type office space that principally caters to the residential population of a municipality (classified as Population-Related Employment). This is because the site selection criteria for conventional office space is different from medical/professional- type offices, or public sector office space. While population-related office uses grow in tandem with a municipality’s residential base, major office employment may draw from wider labour pool, and the site selection criteria for these users is therefore different. There has been a pronounced shift in the location of new office supply in recent years across the GTA. From 2000-2008, the GTA’s suburban markets accounted for 91% of all the new supply (on a square footage basis). However, since 2008, buildings in Toronto’s Central Area (the Downtown and Midtown submarkets) that have been completed plus those currently under construction account for 62% of the new supply. This shift in the competitive landscape has impacted the ability of suburban municipalities to meet their office employment growth targets. Since 2000, Brampton has added 1,543,000 sf of new office development (an annual average of approximately 100,000 sf). A comparative analysis of GTA municipalities indicates that City of Brampton is relatively under-represented in terms of office space per capita. There is a notable absence in the number of large private sector office tenants in the market (only Rogers, Loblaw, and the future Canon space exceed 100,000 sf). Guided by the office employment projections provided in the City’s Development Charges Background Study, it is anticipated that Brampton could attract demand to support an additional approximately 1.9 million sf (gross leasable area) of major office space (or 190,000 sf annually) from 2011-2021, at a benchmark of 200 sf per office worker. This represents almost a doubling of the annual new office demand seen from 2000-2015. The major office employment forecast calls for 25,790 jobs to be added from 2021-2041. This translates to demand for approximately 5.2 million sf (gross leasable area) of office space, or close to 260,000 sf per year – a figure that is 2.6 times the rate of new office space added from 2000-2015. In our view, a long-term office demand outlook for the city likely falls somewhere between the recent recorded market performance of 100,000 sf of new space added annually (seen from 2000-2015) and the figure indicated by the Hemson employment projection of 250,000 sf of new space required per year over the forecast horizon. The site selection priorities of smaller professional firms and larger corporate offices may vary, but such users are inclined to locate in environments that fulfill a range of needs, such as: good highway access; public transit access, reasonable commuting time; proximity to a suitable labour pool; proximity to clients and service providers; established amenities for workers; and good visibility and signage potential. The site selection needs of tenants are aligned with those of developers, since a successful long-term investment in an office building is predicated on addressing the needs of users from a locational perspective. CITY OF BRAMPTON CUSHMAN & WAKEFIELD CITY OF BRAMPTON – OFFICE STRATEGY Identifying the locational attributes of Brampton’s planned office locations is necessary to evaluating their potential for growth. In addition to established office nodes throughout the GTA, Brampton will compete in the future with other office concentrations that will emerge, such as the Buttonville Airport Lands (Markham), Lever Brothers Site and Port Lands (Toronto), Markham Centre (Markham), Vaughan Metropolitan Centre (Vaughan), and others. The report provides an assessment of the strengths, weaknesses, opportunities, and threats for each of the City’s planned office areas: the Central Area (including Downtown), Bram West, Fletcher’s Creek South, Bramalea Road South Gateway, and Bram East. Demand for office space in Brampton has been scattered, not concentrated; the 15 new office developments since 2000 are dispersed throughout the city. Current office areas are generally automobile-dependent, with limited amenities nearby. The better performing office areas have best highway accessibility, and future transit enhancements will benefit some planned office locations. The report provides an outlook for these planned office areas, describing their role, the type of office that could be attracted, and anticipated timing. As well, the prospects for future office space in Heritage Heights is examined. While major office should be permitted as a land use in Heritage Heights, and population-related office uses will be required, it is not likely to be a significant component of the local employment base. Planning Perspectives The report provides a review of Provincial and Regional planning policy. It also examines the Brampton Official Plan (BOP), along with select secondary plans, and zoning pertaining to office uses in select locations. The section concludes with a review of Official Plan policies related to office uses in other municipalities. The policy review provides a summary of the requirements of Provincial and Regional planning policies with respect to the accommodation of office and major offices uses in a broader growth management and urban structure context. It also provides an understanding of how the current Brampton planning policy regime – including the Official Plan (BOP), and selected Secondary Plans and zoning regulations – respond to those planning policy directives, and identifies where office uses are accommodated within the City’s planned urban structure, and how they are to be developed. The review of a number of other municipal Official Plans provides guidance as to their approach to growth management, and the accommodation of office uses within their associated planned urban structures. The BOP conforms to the Region of Peel’s Official Plan (RPOP) and Places to Grow (P2G), and is consistent with the Provincial Policy Statement (PPS). The BOP has appropriately incorporated an urban structure that includes centres and corridors, and promotes transit-supportive development, and the development of complete communities in an efficient and cost-effective manner. Overall, mixed-use development, at generally higher densities, is accommodated and promoted. To accommodate planned office employment growth, the City’s Official Plan identifies that a full range of office uses are broadly permitted throughout Brampton, within (a) The Central Area; (b) Major Transit Station Areas; (c) Mobility Hubs; (d) Intensification Corridors; (e) Employment Areas; (f) Retail Areas; and, (g) Residential Secondary Plans. While office uses are permitted in all of these land use/transportation system contexts, there are varying levels of management provided through scale, urban design, locational, and functional criteria. This Official Plan is not a directive-focused plan, but rather is opportunity focused. In terms of implementation, the BOP is focused primarily on providing – and in some cases protecting – the opportunity for the private sector to respond to the market with respect to the range of permitted uses, and, specifically with respect to various forms of office spaces, to where any particular office user may wish to locate. The Official Plan is considered to be a flexible and market-responsive Plan, with minimal use of land use-specific
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