After two years of negative absorption - meaning more space was left empty than leased up - the City of Victoria's office market is seeing a modest recovery, according to a Colliers International survey.
In the first quarter, the vacancy rate in the capital dropped to 8.8 per cent, Colliers found, from the record high of 9.1 per cent a year earlier.
Take-up improved across all sectors, with a total of 34,190 square feet leased, compared with negative absorption in the first half of 2010.
The downtown vacancy rate ticked up, rising to 9 per cent, from 8.3 per cent a year earlier, with the Class B sector taking the worst hit. The suburban vacancy rate is down slightly to 8.54 per cent.
The only office building sale of note this year was Whiterock REIT buying a Class A suburban building for $31.8 million, Colliers notes.
After a record supply of more than 300,000 square feet built in 2010, no new office construction is expected until mid-2012 when 140,000 square feet will open downtown in two projects. About one-third of 2010's new supply has not yet been leased.
from Western Investor August 2011
