Vancouver is located in Canada’s westernmost province of British Columbia and serves as home to the country’s largest and busiest port. Bounded by the Strait of Georgia to the west, the U.S. border to the south and the Coast Mountains to the north, Metro Vancouver has historically been constrained by a lack of available land that results in higher-than-average property values and lower vacancy rates.
Traditionally, the province is a natural resources powerhouse, producing timber, coal, aluminum and a range of mineral ores including copper and zinc. Exposed to the economies of the Pacific Rim, the regional economy has been shaped by international trade to focus on shipping, distribution and warehousing.
Home to more than 2.3 million residents, Metro Vancouver has grown in recent decades to reflect a more diversified economy – incorporating a vibrant film, television and video game production scene within an established high-tech sector – along with a strong service economy comprising engineering, construction, financial services and legal firms. Along with tourism and niche manufacturing, the port continues to be a primary economic driver for the region, province and Canada at large.
The Metro Vancouver office market comprises approximately 50 million square feet of space. Downtown Vancouver’s office market achieved greater balance in 2015 with the addition of several new towers after a decade of posting one of the lowest vacancy rates of any metropolitan core in Canada. Vacancy in suburban office markets varies but in general has a fundamental resilience to normal market fluctuations due to land-supply constraints and limited inventory. Lease rates in Downtown Vancouver are among the highest in Canada and are anticipated to stabilize after years of steady growth.
Retail space in Downtown Vancouver remains in demand but a lack of supply is impeding further investment in the market. Vacancy remains low with rental rates holding steady throughout Metro Vancouver. Luxury retailers are increasingly making their presence known in the Downtown core. Significant redevelopment and expansion of established shopping centres throughout Metro Vancouver continues unabated.
Metro Vancouver’s industrial market has an inventory of approximately 191 million square feet. With regional industrial real estate activity primarily focused on growth in shipping, distribution and warehousing uses as a result of ongoing port investment, erosion of the region’s limited industrial land base remains a concern in Metro Vancouver. An overall lack of supply restrains deal and dollar volumes and contributes to the highest valued industrial real estate in North America. Ongoing transportation infrastructure investments will increase access to industrial areas and improve the flow of goods throughout the region.
Investment in commercial real estate in Vancouver and British Columbia has topped $1 billion each year since 2003 (except 2007), set a record in 2012 with $2.35 billion invested and surpassed $2.1 billion in asset sales in 2013. More than $1.95 billion was invested in 2014. Investor demand for all commercial real estate asset types has traditionally been high and demonstrates the presence of a mature, well-balanced market. A shortage of available product further restricts investment flow as buyers covet the strength and safety of the Vancouver commercial real estate market.
The Vancouver office was an integral partner in the formation of Avison Young. Five top BC commercial real estate brokers established an Avison & Associates office in 1994. The office subsequently joined with the Avison & Associates office in Ontario and Alberta-based Graeme Young & Associates to form Avison Young in 1996. As the home to many of Avison Young’s top producers year after year, the Vancouver office has closed billions of dollars of commercial real estate sales, negotiated a significant number of office-accommodation transactions and industrial lease deals, and has been a leader in landlord lease representation.