Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

November 03, 2009 10:00 ET

Opportunities Improving for Vancouver's Corporate Tenants

Vacancy Rate Jumps Throughout Canada's Major Cities

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 3, 2009) - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that the amount of space available for lease or sublease in downtown Vancouver has more than tripled over the past 18 months. Further, after a number of years of steadily escalating rents, asking rates appear to be levelling off somewhat.

Combined Class "A" and Class "B" vacancy rates in downtown Vancouver have climbed to 5.9% and at present nearly 1.4 million square feet of space is unoccupied. Tenants are also continuing to seek out less expensive leasing opportunities in the suburban markets, where there has only been a slight rise in vacancy rates over the past six months. In Richmond, for example, vacancy rates are in the 16-18% range, while in Burnaby the vacancy rate is tracking closer to 9%.

"After some months of corporate consolidations and a surging sublease market it would appear that a degree of equilibrium is returning to the Metro Vancouver area's real estate markets," said Jon Bishop, Vice-President and General Manager of Devencore Company Limited. "There are substantially more opportunities for tenants today that there were only a year ago, so this is a very good time for tenants and their advisors to sit down and assess their ongoing requirements. For those tenants who have leases coming up for renewal over the next 12-24 months, this is the right time to take advantage of the opportunities that have emerged over the past few quarters."

In Metro Vancouver's industrial markets, supply seems to have finally caught up to demand. Over the past six months vacancy rates have climbed a full percentage point and are now over 4%. The largest share of this increase has been driven by large blocks of speculative construction going unleased in the slower market. Many companies have put excess space on the sublease market, pushing the availability rate of real estate even higher. Further, sales transactions for existing warehouse product have recently set new benchmarks below $100 per square foot, which are prices not seen since 2005. These conditions are providing tenants with an excellent opportunity to review, consolidate, renew or expand their real estate portfolios.

In Canada's other major urban centres vacancy rates have also risen significantly, though some cities have been more dramatically and immediately impacted than others. Until the recession hit the office market in most of the country was weighted in favour of landlords, but the jump in vacancy rates should loosen up the markets in most major cities and offer more options to those tenants who have been seeking new leasing arrangements.

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 of owners, tenants, investors and developers worldwide.

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Contact Information

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