Vancouver’s commercial property market feels the squeeze

Vancouver’s Mount Pleasant and Broadway corridor are ripe for development, says CBRE report
Vancouver’s Mount Pleasant and Broadway corridor are ripe for development, says CBRE

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Plus, B.C. workers need more rental housing and Burnaby loses latest round in pipeline battle

Investment outlook
B.C.’s commercial property market is likely to outperform the rest of Canada’s in 2016, according to commercial real estate services firm CBRE Group. Its 2016 Canadian Market Outlook, released Tuesday, predicts that investor and tenant demand will continue to shift to B.C. next year.

In Vancouver, vacancy will remain slightly higher due to new supply, but an active tech sector and other professional services will help mitigate softness in the resource sector. While foreign capital, especially from Asia, will continue to chase prime assets, local buyers will remain competitive and may drive demand for suburban assets as product becomes limited in the core. Investors and developers will continue to build strategies around inner submarkets like Strathcona and Mount Pleasant where zoning changes have enabled transformation and opportunities for a broader range of user groups.

The report notes that Vancouver’s importance as a port city and key part of the supply chain was underscored by the 2015 California port strikes, leading to an unexpected spike in demand for industrial space. Availability will likely tighten and construction starts to climb in 2016 as developers respond to demand.

House poor
B.C. is in dire need of more rental housing, according to a new index from the The BC Non-Profit Housing Association. In its expanded Rental Housing Index, the BCNHPA revealed on Monday that not only has the housing system created a crisis for single mothers, renters under 30 and aboriginal people, but the lack of available rental housing could affect economic growth. Workforce data shows that while renters are sometimes restaurant and retail workers, many are health care providers, construction workers and accountants.

Linda Morris, senior VP at Vancity, which co-sponsored the research, commented in a statement: “Access to stable and affordable housing for the workforce is part of a healthy community. Vancity is advocating for alternatives to support growth in the affordable housing sector, including rental.”

Going the distance
The City of Burnaby will appeal Monday’s B.C. Supreme Court ruling that Burnaby cannot use its bylaws to impede or block Trans Mountain’s pipeline expansion. Justice George Macintosh ruled that “The core of a federal power is the authority that is essential to enable Parliament to achieve the purpose for which the exclusive legislative jurisdiction was conferred” and “the NEB has the constitutional power to direct or limit Burnaby in the enforcement of its bylaws when the bylaws interfere with or block the NEB in its regulation of the Trans Mountain Pipeline and the Expansion Project.” Burnaby Mayor Derek Corrigan told the Burnaby Now that the case may ultimately be appealed to the Supreme Court of Canada.