A new report just out from Avison Young on commercial leasing, with interesting news on vacancy rates throughout the region. Surrey saw a significant decline in leased space, with downtown Vancouver’s vacancy rate also climbing. With new construction about to come on board factored in, Avison calculates that the downtown vacancy rate is around 9 per cent (though sounds more like tenants reducing the amount of space they want than outright closures).
All very interesting, as I like to say, considering the big groundbreaking for The Exchange tower by Credit Suisse (attended by our very own mayor) this week, a building that has yet to find tenants, and the Manulife tower going up at Howe and Nelson, also with no announced tenants yet.
A couple paragraphs from the Avison news release.
Downtown (-270,560) led Metro Vancouver submarkets in terms of total negative absorption from January 1 to December 31, 2013, while Surrey (-137,809) registered its greatest amount of negative annual absorption since Avison Young started tracking the market in 1997. Richmond and New Westminster both recorded in excess of 165,000 sf of positive annual absorption and, with moderate demand in Yaletown and on the North Shore, were able to mitigate flat or weaker demand in the region.
At year-end 2013, vacancy in Metro Vancouver climbed to 7.8% from 7% 12 months earlier, the highest vacancy since year-end 2010. Downtown vacancy rose to 5.7% from 3.9% at year-end 2012, the highest vacancy registered since 2005. Vacancy in two of the three submarkets that comprise Vancouver proper – Downtown and Broadway (Yaletown is the other) – rose compared with 12 months earlier, but still remained tight when compared with other Canadian and U.S. metropolitan office vacancy rates.