New projects makes workspace in suburbs more readily available than in city centre
Derrick Penner
Sun
Downtown Vancouver office space was even harder to find in the fourth quarter of 2006 while suburban workspace became easier, according to two of the big commercial real estate brokers.
Chris Clibbon, senior research analyst with CB Richard Ellis, said Greater Vancouver’s overall office vacancy rate hit a new five-year low of 7.8 per cent.
However, while vacancy in the downtown core and along the Broadway corridor tightened up to five per cent and 3.4 per cent respectively, the pressure in suburbs declined.
“We’re starting to see separation between the downtown-Broadway market and suburban markets,” Clibbon said.
That means vacancy rates in municipalities such as Burnaby, Surrey and Richmond are not dropping at the same pace as the city centre, although they were a year ago.
Clibbon added that in some cases, that is because developers are building new office space that is close to completion.
In Burnaby, for instance, about one million square feet of new office space will come into the market, whereas in downtown Vancouver, the only new project underway remains the 238,000-square-foot completion of the Bentall 5 tower on Burrard Street.
Shawna Rogowski, a research associate at Colliers International, added that some big moves also contributed to rising vacancy in some suburban areas.
Rogowski noted that Worksafe BC’s move from Richmond opened up an 81,000-square-foot hole that contributed to the municipality’s overall 114,000-square-foot increase in available office space.
“I do think we’ll make up for that,” Rogowski added. “We have [leasing] deals on the way that will make for positive absorption in Richmond.”
In its fourth-quarter report, CB Richard Ellis estimated downtown Vancouver’s average gross lease rate to be $30.20 per square foot. On the Broadway corridor, the average gross lease came to $25.35 per square foot.
In Burnaby, CB Richard Ellis pegged office vacancy at 7.5 per cent with an average gross lease of $25.81.
In Richmond, vacancy stood at 17.3 per cent with an average lease rate of $22.17.
New Westminster had the highest office vacancy at 21 per cent and lowest average gross lease rate of $20.17.
© The Vancouver Sun 2006