BC Business
Downtown Vancouver has the lowest office vacancy rate in Canada.
In a press release from last week Los Angeles-based CBRE Group Inc., a commercial real estate services and investment firm, summed up information from their National Office and Industrial First Quarter 2013 Statistical Summary. The focus was Canadian office construction, office and industrial real estate and the complicated question of whether demand is going to meet the space available across the country.
“You’ve got to be careful [in predicting office space availability], because often construction is backward looking. You find yourself in a situation where there isn’t a lot of space, then everybody decides to build—there’s no guarantee demand will be there two, three, four years out,” says CBRE’s Ross Moore, director of research for Canada.
With Vancouver’s extremely low downtown office vacancy rate of 4.1 per cent, Moore sees the city’s construction boom as having a minimal affect on absorption rate: in a worst case scenario, going from just over four per cent vacancy to eight percent. “By historic standards I think we can all live with an eight percent vacancy rate,” he assured.
Vancouver’s downtown office vacancy rate is currently the lowest in Canada, and while Ross confirms that high demand does result in price increases, he’s reluctant to offer a straight-up comparison between Vancouver and other Canadian cities, saying instead that “Vancouver, Calgary and Toronto … are certainly amongst the most expensive downtown office markets in North America.” Trailing the obvious leader of New York, Moore sees Vancouver, Calgary and Toronto in the same league as pricey downtown markets in San Francisco and Boston.
The statistical summary also touched on the industrial land market, saying that Vancouver is continuing to experience strong demand in this sector. In addition to companies looking to invest in or lease out industrial space, users (companies looking to buy industrial space for their own purpose) are driving this market as well. “With interest rates so low, a lot of users are looking at today as a good time to buy,” says Moore, who noted that the last four years has seen an upsurge in user-driven industrial land purchases.
For more information, find the full release here.