Vancouver leasing dips, lower vacancies forecast
Leasing activity in central Vancouver has slowed recently but the vacancy rate is expected to drop to about 5 per cent this year, compared with just over 6 per cent last year, according to a report by Canadian commercial property specialists Avison Young.
The agency said it expected 250,000-300,000 square feet of existing grade-A space to be absorbed this year.
Little new supply would come on to the market this year, due to a lack of pre-lease commitment, the report said.
Total inventory of grade-A stock stood at 18.42 million sq ft, with occupied space totalling 17.55 million sq ft.
Vacant office space this year would total 872,000 sq ft, compared with 1.12 million sq ft last year.
Grade-A leasing activity in suburban Vancouver markets such as the West Broadway corridor, Burnaby and Richmond would continue to experience low levels of rental activity, the report said.
In the West Broadway area, new inventory would include 110,000 sq ft of new grade-A space and a second 70,000 sq ft building.
These new developments and business relocations would result in an increase in vacancy rates, the report said.
The Burnaby grade-A office market would continue to outperform all other Vancouver markets, with a low 2.4 per cent vacancy rate.
'In addition, pre-lease and or purchase commitments from large design-and-build tenants has contributed to the announcement of several new developments which will be completed this year,' said the report.
This would result in more than 762,000 sq ft of new inventory being added at Burnaby.
Avis Young said that Burnaby would continue to compete with Richmond for hi-tech and services industries in business park locations.