Canadian landlords expecting workers to return to offices vacated during the pandemic were delivered a blow as an omicron variant surge at the beginning of the year prompted more companies to give up leases.

The national office-vacancy rate rose to a record 16.3 per cent in the first quarter, according to a report Wednesday by commercial real estate brokerage CBRE. The trend was reflected in Toronto, Canada’s largest city and financial capital, where vacancies ticked up to 14.8 per cent.

The beginning of the year saw much of Canada hit by COVID-19’s highly infectious omicron variant, prompting a fresh round of lockdowns and restrictions in many parts of the country. With the renewed delay in returning to offices, many companies had been working remotely for the better part of the past two years. That appears to have emboldened more tenants to vacate their spaces entirely.

In the first three months of the year, nearly 2 million square feet (186,000 square meters) of offices become vacant nationwide, the report showed. Meanwhile, the completion of new buildings brought almost 700,000 square feet of space to the market, with nearly 15 million square feet still under construction.