The latest Altus Group analysis found that demand for Vancouver’s office spaces significantly pushed down vacancy from a near-record level of almost 11% in mid-2016 to around the 7% range in the middle of this year.
This was even more pronounced in the downtown area, which saw vacancy shrink from 7% a year ago to below 5% in mid-2018.
However, the Vancouver Flash Report 2018 noted that Vancouver’s office space supply received approximately 1.3 million square feet of new additions over the past 8 quarters, which was only less than half the amount injected in the market from mid-2014 to mid-2016.
Moreover, this paled in comparison to the 5 million sq. ft. of new industrial space that Vancouver had from mid-2016 to mid-2018.
Fortunately, the nearly 2.8 million sq. ft. of office space under construction as of mid-2018 is expected to keep up with demand. The new additions would comprise 2 years of supply, taking into account the annual absorption trends from 2015 onwards.
A late October report by RE/MAX Western Canada indicated that sustained investment by major technology firms will propel the Vancouver office market for the foreseeable future.
With leading tech companies like Amazon and WeWork steadily growing their footprints in Vancouver, commercial demand will enter a boom period of pitched activity, according to RE/MAX Western Canada regional executive vice president Elton Ash.
Further expansion across Western Canada by these firms is also expected for the rest of the year and throughout 2019.
“Investment by major companies like Amazon in Calgary and Greater Vancouver is evidence that commercial real estate – office space specifically – in Western Canada remains a hot commodity,” Ash said.
“As Canada continues to push further ahead in areas like technology, investors both domestic and abroad see the potential for growth here and are willing to call Canada home.”
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