Lee & Associates has just released Q2 2021 North America industrial, office, retail, and multifamily market reports.
Metro Vancouver Industrial Market
Metro Vancouver’s Q2 2021 numbers are indicative of a thriving industrial market. Surpassing other major Canadian markets, average industrial market rates have risen to $14.90 PSF – an 8.9% YoY increase. A new benchmark has been set this quarter with over 2.3 Million SF of industrial space leased. Amazon’s presence continues to impact market performance – the eCommerce giant has committed to another brand new 203,172 SF distribution centre in Delta. Amazon now has 5 new industrial facilities underway in the region. Metro Vancouver faces an industrial land crunch with only 2.0% of new inventory currently in the pipeline. In the future, there will be continued competition for available industrial options.
Metro Vancouver Office Market
Canada became a global leader in first dose vaccination rates this quarter with the beginning of the vaccine rollout, which resulted in lightening restrictions and increased office activity. Metro Vancouver’s vacancy rate decreased from quarter-to-quarter for the first time since the start of the pandemic, down 34 basis points from Q1 2021. Reopening plans, tours, and renewal discussions have all begun to pick up. Despite the expected popularity of a hybrid office model in the future, most employers do not intend to continue remote work full-time, showing there is still strong demand for office space. Overall, Vancouver is still on the path to remain the tightest major downtown office market in North America.
Metro Vancouver Retail Market
Restrictions lifting this quarter due to the vaccine rollout, reduced debt servicing cost from low interest rates, and higher savings due to government income support and decreased spending last year, have all begun to contribute to retail sales growth. Despite many retailer closures and insolvency filings throughout 2020, some companies have used this time to expand their presence in Metro Vancouver. The Q2 vacancy rate is the lowest recorded in years, decreasing for the third consecutive quarter. Footlocker, Peloton, and H&M all recently opened flagships stores. There also seems to be a demand for entertainment, as the Van Gogh exhibit downtown Vancouver broke records with ticket sales this year. Vancouver’s retail market remains resilient.
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