There has been no net office space leased in downtown Vancouver in the past three months and, if Burnaby is taken out of the equation, suburban markets are also reporting "negative absorption" since January, says a report from DTZ Commercial, Vancouver. The report found that the downtown saw negative absorption of more than 25,000 square feet in the first quarter. All of the loss, minus 28,919 square feet, was in the Class A sector, partly balanced by takeup in Class B and Class C offices. All together, the downtown has an inventory of 23.8 million square feet of offices in 221 buildings.
There is churn in the downtown - 11 "significant leases" were signed up in the first quarter - but that movement won't be seen until this summer or beyond, DTZ noted. There is also 1.4 million square feet in new space being developed in four new office towers, all of which are expected to complete within three years.
The downtown office vacancy remains at 3.9 per cent, up 0.1 per cent from a year ago, DTZ reports.
DTZ estimates that there is the equivalent of a 23-storey office building of Class A space vacant downtown, up 10 per cent from a year ago, at approximately 336,900 square feet.
Gross average rent for Class A space is currently up 3.8 per cent from a year earlier, to $49.44 per square foot. A separate report from Cushman&Wakefield commercial real estate says downtown Vancouver has the highest office lease costs in Canada.
In Metro Vancouver suburban markets, only 21,452 square feet was leased up in the first quarter of this year, most of it in Burnaby. Suburban vacancy rates range from 7.9 per cent on the North Shore to 18.3 per cent in Surrey, DTZ reports. DTZ estimates there is now more than 2.2 million square feet of vacant office space in the suburbs.
