Transit, office and residential space come together in Vancouver.
Office space, multi-family homes and mixed-use buildings get top billing in Deloitte's quarterly real-estate survey
This morning Deloitte offered a preview of its quarterly Crane Survey, due out by the end of May, which examines major construction and development projects in greater Vancouver. The survey considers the affect of residential development along with retail, office and industrial space as well as infrastructure projects and community development.
Leading the presentation was Deloitte Real Estate’s director, Jennifer Podmore Russell. The upcoming survey’s theme was change and new expectations in development—something that Russell tied to transit and transportation, mixed-use buildings, residential real estate and office real estate space.
Transit and Transportation
“Transit has been a game changer,” said Russell, pointing to the prevalence of urban centres built with proximity to transit hubs explicitly in mind, like Brentwood Town Centre and Vancouver’s Oakridge Centre.
In Vancouver especially, transit is driving development, and is a huge contributing factor to the creation of urban neighbourhoods and high streets. Russell pointed to Surrey as an area that is relying too heavily on vehicle transportation. Currently 85 per cent of trips in Surrey are made by vehicle, and “this dependence on vehicle traffic is counter to everything we’re doing as a region,” said Russell.
While mixed-use developments have been going up in Vancouver for decades, “mixed-use has dramatically shifted since 2011,” Russell insisted. It is no longer sufficient to add a token percentage of retail space onto a residential building—the reasons behind the various spaces included in a building (from residential to retail and office) need to be clear, and developers now have to look at how they can accommodate all users of the space (tenants, shoppers, retailers, office workers), rather than simply looking at what can be done for the dominant user.
Residential Real Estate
Russell focused on the way in which Vancouver’s residential mindset is shifting—away from detached single-family homes, and towards urban living: “multi-family housing will be the dominant class moving forward,” she predicted.
Tied to the fact that the amenities of urban living are becoming more and more important to home buyers, Russell pointed out that while greater Vancouver’s general absorption rate is stable, demand is very spotty. Certain neighbourhoods continue to see higher than average demand, while those without access to transit or lifestyle amenities are struggling.
Office Real Estate
Office space is going through a major transition in Vancouver, with 1.7 million square feet of new space set to become available in the downtown core alone. While this more than doubles the current stock of 1.6 million square feet, Deloitte is convinced that this stock will not oversaturate the market as Vancouver has “underbuilt for the last decade,” said Russell.
However, some office space will suffer from the increased stock. Older buildings will most likely see a vacuum affect, as tenants flock to newer options, forcing them to invest in upgrades and renovations in order to stay competitive. Suburban office parks have already suffered significantly, as their lack of access to transit and amenities have made them much less desirable than transit-centred options.