Healthy demand and strong economic fundamentals continue to drive office leasing activity in Metro Vancouver, according to a new report
A fresh report from Avison Young revealed that vacancy in Metro Vancouver offices is it its lowest since the end of 2014, a development mainly fuelled by what the commercial real estate services firm called “healthy absorption levels”.
In a February 7 CNW press release, Avison Young announced that vacancy levels in the area dropped to 9.7 per cent by the end of 2016. To compare, the level for the year before was at 10 per cent.
“Positive annual absorption of 849,868 sf in 2016 was the second-most annual absorption recorded since 2007 and followed 1.3 [million square feet] plus of absorption registered in 2015. Virtually all new supply delivered since 2015 has been occupied or will be primarily occupied by the first half of 2017,” the release stated.
“With select exceptions, concerns that vacancy would spike in older class A, B and C properties as companies moved into new developments have not been realized.”
Meanwhile, vacancy in the Downtown area dropped to 7.2 per cent. Avison Young officials attributed this to a resilient market.
“There was no meaningful movement in rental rates in 2016 and they should remain fairly stable in 2017, although further decreases in the vacancy rate may apply modest upward pressure to net effective rates,” Avison Young principal Brian Pearson said.
“The outlook for the Downtown core is fairly stable although delivery of the Exchange in late 2017 could add substantial vacant and available inventory to the market,” he added. “Developers and landlords will be actively preparing in 2017 for the next development cycle, which should be characterized by a stable, balanced Downtown market with reasonable transaction volume and moderate absorption.”
The full report can be accessed here.
Related stories:
Financial services firms to sustain demand for Canadian office space
Demand outpacing supply in Vancouver’s industrial sector
