Some hopeful signs are starting to appear, new report says
Despite the continuous ill effects of the COVID-19 pandemic on the Vancouver market, signs of recovery have already begun making themselves apparent in the region’s 54-million-square-foot office segment, according to a new analysis by Avison Young.
“While the overall office vacancy captured at mid-year 2021 had risen notably year-over-year (basically at the onset of the pandemic), the increase in regional vacancy recorded since year-end 2020 was much more circumscribed and will likely come to represent the full extent of COVID-19’s opening impact on the regional office market,” Avison Young said in its Mid-Year 2021 Office Market Report covering Metro Vancouver.
The slowdown in the rise of vacancies was accompanied by a “substantial decline” in negative absorption during the January-June interval, Avison Young said.
“Both indicators point to a more generalized stabilization of the regional office market that will continue trending towards recovery, albeit with certain markets lagging others,” Avison Young said.
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For the whole region, the office vacancy rate stood at 8.4% as of the first half of the year.
“Regional vacancy remained comparatively tight and was still less than the 9.1% posted just four years earlier at mid-year 2017,” Avison Young said. “While regional vacancy is expected to rise slightly through 2021, a balanced market is still expected.”
The federal government’s steady roll-out of vaccines has helped fuel optimism, in turn spurring “a widely forecasted resumption in economic activity as the implementation of return-to-office protocols has stimulated real estate decision-makers to action,” Avison Young said.
“While the second half of 2021 will likely see vacancy rise in most office markets within Metro Vancouver (particularly within Vancouver due to new supply), a further curtailing of pandemic-related precautions is anticipated to further solidify activity in the second half of the year with a corresponding improvement in metrics such as vacancy and absorption through 2022,” Avison Young said.
