Office vacancy in downtown Toronto has remained at a 4.6 per cent two-year record-low for the past three quarters, according to Cushman & Wakefield’s Q1 2016 stats.

Meanwhile, the area continues to expand with the addition of the Bay Adelaide Centre, East Tower, a one-million-square-foot office building that recently came to market.

“This is a feel good story that just keeps on giving,” said Stuart Barron, National Director of Research, Canadian Markets, Cushman & Wakefield. “At different points since 2009, we’ve predicted higher vacancy against increasing supply, but those concerns have simply failed to materialize. Vacancy remains at a low-water mark — and we’re seeing strong interest across the board for new and older buildings from tenants of all sizes.”

Key Q1 2016 findings show a 5.6 per cent – 1.8 per cent drop in vacancy in the downtown south market, home to many new towers.

Further downtown growth at 32.1 per cent by 2019 is expected due to increasing U.S. demand, the low-dollar value and a continuous low-interest-rate environment, making it the largest build cycle in Toronto’s history.

Still, Barron says there are reason to be cautious despite the technology and financial sectors spurring “tremendous expansionary momentum in the marketplace.”

“As tenants move into the new towers, we’re about to see 1.2 million square feet of space return to market over the next couple of quarters, and that should put upward pressure on vacancy,” he says. “In addition, weaker global conditions could slow growth in downtown Toronto.

The suburbs tell a different story with weak growth pushing vacancy up in the GTA West node, which saw vacancy rise to 14.1 per cent this quarter from 13.0 per cent last quarter. Occupancy in the GTA East fell as vacancy rose to 10.3 per cent from 9.5 per cent last quarter.