Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

May 06, 2010 10:30 ET

Devencore Ltd.: Leasing Opportunities Vary Widely Throughout Metro Vancouver

Canadian Office Market Begins to Stabilize as Economy Recovers

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2010) - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that vacancy rates declined in downtown Vancouver's office buildings over the last six months of 2009 as the global economy began to improve. By year end, the combined vacancy rate was at 4.6%, down from 5.9% in mid-2009. Perhaps what is most notable was the rapid decrease in available sublease space. A year ago subleases represented almost 50% of the office space available for lease downtown, but by the end of 2009 subleases represented less than 20%. Outside the downtown core, however, overall demand for space continued to be flat and supply increased in several suburban markets.

"Through 2009, companies that needed to cut costs either subleased their space or reduced the amount of space they occupied. At the same time, expansion plans were put on hold. This dynamic provided opportunities for tenants who were not adversely affected by the global economic downturn to either expand into discounted real estate or trade up to higher-quality spaces," said Jon Bishop, Vice-President and General Manager of Devencore Company Limited. "We also note that, although supply in the downtown office market has increased over the past two years, most of the availabilities are in premises of less than 5,000 square feet. Demand for high-quality multi-floor space has been strong, but supply in this sector remains very limited."

In Metro Vancouver's suburban markets, soft tenant demand has put downward pressure on rents and prompted landlords to offer a greater range of leasing inducements. As the economy gains momentum throughout 2010 opportunities will remain plentiful in Burnaby, Richmond and Surrey as there is a significant amount of new inventory being delivered.

"Through 2010, we anticipate that many tenants not requiring a downtown address will be turning their attention to the suburban submarkets, Mr. Bishop said.

In the rest of the country, a measure of stability seems to be returning to the corporate real estate sector. While the overall vacancy rate in Canada's major cities jumped from 6.0% to 7.0% over the last half of 2009, this jump was entirely attributable to the new inventory that arrived on the market. In fact, approximately 2.2 million square feet of space was absorbed over the last six months of the year. Over the next six to twelve months the balance of power between landlords and tenants will depend on the dynamics of each local market, and in many cities the best opportunities for tenants will likely be found on a building by building basis

About Newmark Knight Frank Devencore

Devencore is the Canadian partner of Newmark Knight Frank, one of the largest independent real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution.

Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 200 offices in established and emerging property markets on six continents. Last year, transactions were valued at more than $32 billion with annual revenues of over $811 million. With a combined staff of more than 6,300, this major force in real estate is meeting the local and global needs.

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Contact Information

  • Devencore Ltd., Chartered Real Estate Broker
    Newmark Knight Frank Devencore
    Sylvie Bachand
    Director, Marketing and Communications
    514-392-1330, ext. 225
    Devencore Company Ltd.
    Newmark Knight Frank Devencore
    Jon T. Bishop
    Vice-President & General Manager
    604-681-3334, ext. 2225