Second-quarter statistics show the Metro Vancouver office market reawakened after a 15-month hiatus, while the warehouse market continues to be white-hot. Industrial landlords could not be more in the driver's seat, while office landlords are most likely feeling a bit better, all things considered. With the relaxation of Public Health Orders, and with most businesses welcoming staff and customers alike back into the office, a sense of normalcy has begun to return to the office space market, providing relief for all. Sublease space looks to have peaked in Q1 with a sizable drop in Q2, and all indications suggesting further declines going forward as new sublease space coming to market has slowed to a trickle, and a healthy take up of sublease space already being marketed. While difficult to imagine conditions becoming any worse for warehouse users, second quarter data shows Vancouver’s industrial market is now effectively out of space with a sub one percent (0.9%) vacancy rate. The lowest in Canada, North America, and quite possibly anywhere in the world.
The Metro Area office availability rate dropped just slightly during the quarter, finishing at 9.8%, compared to 9.9% in Q1, and 6.8% a year ago. Across the region, suburban markets saw available space drop by almost 230,000 square feet, while both the downtown market and Broadway Corridor (and surrounding submarkets) saw the amount of available space increase, albeit by more modest amounts relative to the last year and a half. At quarter-end, downtown availability was 10.2%, suburban markets 8.9%, and Vancouver City (including Broadway Corridor) 10.8%. By comparison, Metro Vancouver's industrial market saw conditions once again become even more restrictive for tenants with the overall availability rate decreasing by 40 basis points to 1.0%. During the quarter, both office and industrial rents moved higher with region-wide office lease rates increasing by 9.5%, while industrial rents increased by $0.32 per square foot, or 2.1%.
The Metro Area office availability rate dropped just slightly during the quarter, finishing at 9.8%, compared to 9.9% in Q1, and 6.8% a year ago. Across the region, suburban markets saw available space drop by almost 230,000 square feet, while both the downtown market and Broadway Corridor (and surrounding submarkets) saw the amount of available space increase, albeit by more modest amounts relative to the last year and a half. At quarter-end, downtown availability was 10.2%, suburban markets 8.9%, and Vancouver City (including Broadway Corridor) 10.8%. By comparison, Metro Vancouver's industrial market saw conditions once again become even more restrictive for tenants with the overall availability rate decreasing by 40 basis points to 1.0%. During the quarter, both office and industrial rents moved higher with region-wide office lease rates increasing by 9.5%, while industrial rents increased by $0.32 per square foot, or 2.1%.