Q2 2018 Metro Vancouver Office Market Overview
Vancouver’s metro office market continues its torrid pace of increased absorption, lower vacancy rates and higher rental rates. Rapid expansion in Vancouver by the tech sector led by Amazon & the co-working dynamic led by WeWork together with a lack of new supply has made Western Canada’s largest city record the lowest vacancy rate and largest occupancy cost increase in North America since the start of 2018.
While new major office developments are in motion the needed supply to balance the market will not be ready for occupancy until the early 2020’s. In the interim, tenants will face increased pressure on rents and increased competition for the best available corporate & creative spaces.
Despite increased headwinds for investors by way of the Bank of Canada’s July 0.25% increase in the prime borrowing rate to 1.50% and the provincial government’s tightening of the transparency of foreign ownership entities making real estate transactions in British Columbia the demand & price escalations for office buildings in Vancouver are forecast to continue.