Vancouver office vacancy rates spike amid COVID-19, but well below national average
Posted January 15, 2021 11:05 am.
Last Updated January 15, 2021 11:07 am.
VANCOUVER (NEWS 1130) – Office vacancy rates in Vancouver and elsewhere in Canada have spiked due to the COVID-19 pandemic, but it appears the West Coast city’s situation isn’t quite as dire as in other parts of the country.
With so many of us now working from home, it seems some businesses and organizations no longer see a need for having a physical office.
Office vacancy in downtown Vancouver hit 5.6 per cent in the fourth quarter of 2020, the highest it’s been since early 2018, according to commercial real estate services firm CBRE.
“Which marks that shift that we’ve seen as a result of some work from home and reduction in gathering sizes and things like that,” explains Jason Kiselbach, CBRE Vancouver’s managing director.
Trying to find appropriate office space in Metro Vancouver has been tough in recent years, but vacancy has risen during the pandemic, to 6.2 percent in Q4 2020. Listen @NEWS1130 as @CBREVancouver explains despite our rising numbers, vacancy rate still lower than national average.
— Martin MacMahon (@martinmacmahon) January 15, 2021
However, Vancouver’s office vacancy rate remains the lowest relative to other Canadian cities. Kiselbach says it’s important to note that prior to the COVID-19 pandemic, Vancouver had been facing a shortage when it came to office spaces available.
“So we went into this year (2020) with a real lack of supply, so even though it may sound like the vacancy is shooting up, it’s really just trending more towards a balanced market,” he explains. “And most of the supply that we’re seeing come on the market is in the smaller-sized category. We haven’t seen any large corporation signal that they’re shedding a significant amount of space at this point.”
Outside of the downtown core, CBRE has found the office vacancy rate is slightly higher in the greater Vancouver area, at just more than six per cent in the suburban markets.
That, Kiselbach says, is mainly due to “a couple larger vacancies that have come up.” However, he notes the trend is similar to what we’re seeing in the downtown area.
National figures more dire than in Vancouver
Comparatively, Calgary has an office vacancy rate of 27 per cent — the highest in Canada — while Edmonton’s figures show 21 per cent of that space is empty.
The drastic difference in vacancy rates appears to have a lot to do with COVID-19 policies.
“It’s really just related to where they’re (provinces/cities) are at in terms of response to the pandemic. You hear these full lockdowns in cities and curfews, things like that. That has led to tougher environment for office space in their downtown cores,” Kiselbach says.
What does this mean long-term?
While it may feel as though more people will opt to continue working from home in the future, CBRE believes it won’t last.
“Our sense is still a positive one,” Kiselbach tells NEWS 1130. “I think this is a short-term trend and we’re just looking at, potentially, increased vacancy until we get to that point of the vaccine being widely available and distributed. So, later this year.”
He believes there will always be a shortage of space locally, as we’ve seen pre-pandemic, due to a number of factors.
One of those factors includes Vancouver being an attractive city for people to want to move to.
“And we’re developing this great high-technology job space that all bodes well for the long-term future of office space downtown,” he explains.
Read CBRE’s full report:CBRE - Office vacancy - Canada_Quarterly_Statistics_Q4_2020