The value of permits hit $222 million in June, the highest in more than five years
Bruce Constantineau
Sun
B.C. building plans surged ahead during the first half of 2005 as the value of building permits issued throughout the province increased by 22 per cent to more than $4.9 billion, Statistics Canada reported Monday.
Plans for new, non-residential projects led the way, with the value of those permits going up by 78.8 per cent to $1.7 billion. The value of residential permits increased by 4.3 per cent to $3.2 billion.
The value of institutional building permits issued in B.C. hit a record of $146 million in June, Statistics Canada said.
“We’re seeing a tremendous amount of commercial building activity now as investors come back to the market,” Vancouver Regional Construction Association president Keith Sashaw said in an interview. “It’s happening across all sectors on the non-residential side of construction.”
The VRCA said the value of non-residential permits issued by Greater Vancouver municipalities rose to more than $222 million in June — the highest monthly total in more than five years.
Analysts say high house prices and gradually increasing interest rates will cause B.C. housing starts to level off or decline slightly next year but commercial, industrial and government/institutional construction projects are expected to accelerate in 2006.
Credit Union Central of B.C. chief economist Helmut Pastrick said a strong domestic economy has encouraged more construction in the commercial and industrial sectors while growing government revenues boost government spending on health and education infrastructure — like schools, universities and medical buildings.
He said improved retail sales in B.C. have increased the demand for more retail and warehouse space while declining office vacancy rates encourage developers to build more office towers.
“I expect we’ll see further gains (in non-residential construction) next year,” Pastrick said. “Business investment, like you see here on the non-residential side, will be one of the strongest contributors to economic growth.”
He predicts the B.C. economy will grow by 3.6 per cent this year and by 3.9 per cent in 2006.
A recent CB Richard Ellis report said Vancouver is seeing a sharp demand for office space to accommodate an influx of organizations and firms associated with the 2010 Olympics, as well as firms such as software development companies. The report said the Vancouver Organizing Committee alone is seeking 220,000 square feet of new space by 2009, enough to fill an entire office tower.
Bentall Capital senior vice-president Tony Astles said his company forged ahead with a 13-storey expansion of its Bentall Five tower on Burrard Street this year because the demand for new space clearly warranted it. The addition — which will add 234,000 square feet of space to the building — is already 90-per-cent pre-leased, even though it won’t be finished until April 2007.
Astles said Teck Cominco will occupy the top four and a half floors of the expanded building while the law firm of Fasken Martineau DuMoulin will take four floors and Bell Canada will occupy three.
“The strength of the office leasing market has turned around quickly and we were fortunate enough to anticipate that a little bit,” he said. “We got our plans in place so that when the interest hit, we were ready to go.”
Sashaw said the booming construction market in B.C. continues to place a strain on labour resources.
“We’re seeing more workers moving into B.C., not only from across Canada but from all over the world,” he said. “Our office gets enquiries every week from people in Europe, the U.S. and other places who want to know about the construction opportunities here.”
