Tenants must consider Class B and C buildings
Province
TORONTO — Vancouver‘s central office market will record the lowest vacancy rate in the country next year at just 2.1 per cent, a new report says.
Much of the tightening in the city is due to no new supply coming on line, according to a report by Cushman and Wakefield LePage. Only 80,000 square feet of new construction is expected to be finished next year, the real-estate company said yesterday.
“The Vancouver 2010 Olympic Winter Games continue to have a strong impact with infrastructure-related companies — architects, engineers and construction companies — driving demand for office space,” it said.
“The natural resource and life sciences sectors are also showing strong growth, putting further pressure on the market.” The report predicts tenants will be forced to consider moving into less desirable Class B and Class C buildings, or continue leaving the core for suburban markets.
There also is not enough office space to go around in downtown Toronto, Cushman and Wakefield LePage said.
Vacancies in Toronto‘s central office market will reach a “tight” 3.8 per cent in 2008, way down from the 6.2-per-cent vacancy rate at the end of 2006.
“We are now at the point where demand will have to slow in the central market, simply due to the lack of available space,” it said. “Those expanding or entering the market are now considering space in midtown or further into the 905 regions to meet their space needs.”
The Toronto office space crunch is clearly influencing the national vacancy rate, which is expected to drop to 5.6 per cent in urban centres in the fourth quarter of 2008, down from the current 6.2 per cent.
Toronto is home to 40 per cent of all of the country’s office space.
Cushman & Wakefield surveyed five cities across the country and found vacancy rates dropping in every city but Calgary.
© The Vancouver Province 2007
