Montreal office availability rates are expected to climb in downtown Montreal this year as construction tops off on three new projects.

Sublease space may open up once larger tenants in the city vacant and move into newer developments, according to a Newmark Knight Frank Devencore report.

“Office development and condo construction in downtown Montreal are at a level not seen in nearly two decades,” said Jean Laurin, president and chief executive officer of Newmark Knight Frank Devencore. “After a number of years of subdued economic growth, the city is regaining much of its cachet and beginning to draw increased attention from both national and international corporate tenants representing a wide range of business sectors.”

At the end of 2016, the availability rate was 11.9 per cent, down nearly 1.0 per cent year-over-year. More than one million square feet of new Class A office space has come online in downtown Montreal over the past three years, and an additional 838,000 square feet is scheduled to be delivered by the end of 2017.

Despite the high availability rate, bigger tenants–those seeking spaces larger than 100,000 square feet–have a limited number of options, the report states. Tenants requiring less space, however, have more opportunities.

“The best deals are building specific: landlords losing tenants to the new towers will be increasingly aggressive in marketing their buildings, and tenants with strong covenants will have more leverage in negotiating inducements,” Laurin added.

Current conditions have led some tenants to re-evaluate how they optimize space and productivity in terms of cost, and “greater dynamism and efficiency.”