Lee & Associates has released Q4 2021 North America industrial, office, retail, and multifamily market reports.
Metro Vancouver Industrial Market
Vancouver finishes 2021 with historically low vacancy rates and high market rents. There is high demand and low supply. Competition remains fierce with multiple offers on available spaces. Developers race to keep up with demand — 3.5M SF of new product was added to the pipeline in the last 12 months; construction volume unseen in over a decade. Vancouver continues to draw both local and international investment even with sale prices continuing upward since 2019 and interest rates predicted to rise in the coming year. Just before year-end, Amazon completed the $150 Million sale of a new sorting/fulfillment centre at a vacant industrial site in South Vancouver.
Metro Vancouver Office Market
The return to office for many was halted once again by the surge of coronavirus cases due to the Omicron variant. Vacancy increased for the second consecutive quarter – this time by 41 basis points. Nevertheless, confidence remains strong in Vancouver’s office market, as is reflected by many plans for new developments. This includes a new 800,000 SF research centre planned for East Vancouver, and the launch of One Park in Richmond — the area’s first class-A office development in over 20 years. Rent continued to steadily increase in Q4, as it has done all year, and a few large-scale office building transactions were recorded this quarter. All of which reflects the resilience of the market.
Metro Vancouver Retail Market
At the beginning of the quarter, Vancouver City Council enacted major changes to the permitting and business licensing process which would significantly reduce processing time and costs for new businesses each year. This is a much-needed effort to encourage and support new retailers for the city. Unfortunately, the end of the fourth quarter saw a massive surge of COVID-19 cases due to Omicron. Restrictions came back for restaurants, seated events were reduced to 50% capacity, and gyms were ordered closed. Vacancy increased quarter-over-quarter, but as the new restrictions came into effect in December, Vancouver still saw a strong retail market with large-scale sale transactions in suburban areas and rising rents.
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