- What Colliers sees signs the Vancouver office market is nearing a rebound
- Why The completion of some major office projects without significant new supply on the horizon has helped the market head toward stability, pro says
- What next Vacancy may reach a peak in the next few quarters
Vancouver’s office vacancy rate may be nearing stabilization, according to Colliers.
In its Vancouver Office Market Report Q2 2024, the brokerage said that while the vacancy rate in Metro Vancouver rose for the sixth quarter in a row — to 8.9% from 8.8% quarter over quarter — there are hints of a less volatile future as the growth in vacancy rates slowed.
“Barring any market disruptions, Vancouver seems to be on track to start heading into recovery,” Susan Thompson, associate director of research at Colliers, told Green Street News. “A couple of quarters does not a trend make, but the signs are there that we could be near the peak of this office vacancy cycle soon.”
The completion of some major office projects without significant new supply on the horizon has helped the market head toward stability, Thompson said.
Burnaby saw a significant rise in its vacancy rate — to 12.7% from 8.9% — as 100% of the 275,000 sq ft of new office space delivered in the second quarter was vacant.
But the empty square footage mostly comes from one place, Thompson said. Video-game company EA Sports had a 181,000 sq ft expansion it ultimately didn’t use.
“They ended up deciding they didn’t need it through a variety of reasons,” she said. “So, they gave the whole building back and put it on the sublease market.”
But Downtown Vancouver is heading in the opposite direction, with a 10-bp decline in vacancy to 11.6%.
The shrinking vacancy rate has continued for three quarters, as move-in-ready sublease space continued to be absorbed.
Among the major leasing transactions in the quarter was an agreement for 164,000 sq ft signed by Insurance Corp. of British Columbia at the Hive in the downtown core.
