In its Real Estate Market Study published today, Newmark Devencore reported that vacancy rates in downtown Vancouver are now among the lowest in Canada. Combined Class “A” and Class “B” vacancy rates stood at 3.5% in mid-2011, down from 4.2% at the end of 2010, representing the positive absorption of just over 150,000 square feet. The Class “A” submarket is especially tight, with an overall vacancy rate of only 2.9%. Just over 375,000 square feet of Class “A” space is available for lease or sublet, most of this in smaller blocks.
“Downtown vacancy rates are now returning to the record low levels we saw prior to the financial crisis in 2008-09,” said Jon Bishop, Vice-President & Managing Principal of Devencore Company Limited. “With the tightness of supply, we expect that average asking rental rates, already among the highest in the country, will soon eclipse those achieved during the market peak of early 2008.”
Mr. Bishop added that the downtown office market will be landlord-favoured market over the short term, but that the considerable developer activity currently taking place will soon begin to shift the dynamics of the downtown market.
“No fewer than three major LEED office tower projects have been confirmed,” Mr. Bishop said. “Collectively, these developments will bring nearly 1.2 million square feet of prestige space to the market. The promise of this new premium view space in the downtown area may soon begin to have an influence on the real estate decisions of some larger tenants.”
Over the short term tenant opportunities will continue to be more plentiful in Metro Vancouver’s suburban areas. Leasing activity in these submarkets has also picked up in recent months, with local businesses driving most of the space absorption that is taking place.
Across the rest of Canada, corporate real estate markets have remained relatively healthy in 2011. The overall vacancy rate in Class “A” and Class “B” office buildings in Canada’s major cities dropped from 6.8% to 5.4% over the first half of the year, and total vacant space fell from 14 million square feet to just over 11 million square feet.
About Newmark Devencore
Devencore is the Canadian partner of Newmark, one of the largest real estate service firms in the world. Newmark Devencore is Canada’s largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com
About Newmark
Newmark is one of the largest real estate service firms in the world. Headquartered in New York, Newmark and London-based partner Knight Frank together operate from more than 240 offices in established and emerging property markets on five continents. With a combined staff of more than 7,000 and revenues last year exceeding $993 million, this major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark is a part of BGC Partners, Inc. (NASDAQ:BGCP), a leading global brokerage company primarily servicing the wholesale financial markets. For further information, visit www.bgcpartners.com.