The year ahead is a bright one for commercial real estate prospects in Vancouver. According to a recent report by the Vancouver Courier, the Metro area benefits from arguably the best market conditions in Canada. This means low vacancy rates, record high prices, and continued development.
Here are a few key things that should help define the market in the year ahead:
Limited office space
While a reported 1.6 million square feet of offices are under development in Vancouver, that isn’t expected to change the vacancy rate in any substantial way. In fact, much of this new space is already claimed, such as the old Canada Post building, which, this summer, was revealed as the location for Amazon’s new office in Vancouver. Growth in the tech industry, as well as the workspace-sharing concept, should also continue to keep this sector of the market in high demand.
Vancouver vacancy rates in multi-family dwellings are reported to hover somewhere around the 1% mark, an enviable statistic that all but assures landlords full occupancy. However, the caveat this year is that new legislation is primed to restrict rent increases to 2.5%. New rules are also expected that will allow tenants the option to temporarily move out during renovations rather than have their leases end or rents increase, something of particular importance as far as investment in older properties goes.
Industrial and retail space
The Vancouver Courier 2019 report illustrates the city’s demand for industrial space by revealing that it’s the only city in the country where “bare concrete industrial space” sells for higher prices than luxury condos. The per square foot price is a staggering $800-1000 for trendier projects in the metro area, and vacancy rates remain incredibly low (around 1.46%), despite the development of new space.
Another sector that’s seeing sales surge to record levels is retail. This, despite the fact that the retail sector itself is in flux. Big chains like Target and Sears have been shuttered, while online retail becomes more and more dominant. Nevertheless, a Real Estate News Exchange report states that retail space should not be written off, given the rise of specialty sellers catering to luxury or discount markets.