Metro Vancouver’s commercial and industrial real estate sectors are poised for an enviable run of sustained strength this year, multiple observers have noted.
A significant portion of the market’s robustness will stem from workforce growth, impelled by the entry of several major players into the high-technology industry in Vancouver. This is expected to lead to stronger than average overall performance in 2020.
“Higher employment levels in the services and manufacturing sectors are anticipated to bring an increased number of professionals to [Metro Vancouver] in 2020, ultimately supporting commercial real estate development,” Morguard director of research Keith Reading said, as quoted by Western Investor. “Vancouver’s economy is forecasted to expand at an above-average rate in 2020.”
On an annual basis, Metro Vancouver’s population is currently growing at a rate of 45,000 immigrants and 8,000 people from elsewhere in Canada.
Data from CBRE also showed that the Metro Vancouver’s office vacancy rate of 3.8% is the lowest nationwide. The downtown office vacancy is at 2.4%, the second lowest across the continent.
Meanwhile, industrial vacancy is hovering at a near-record low of 2.5%, driving intensified competition and price growth.
“Rising rents might not be great news for tenants, but it makes new construction more viable in the face of rising costs. New supply is the key to alleviating space constraints and rising costs,” CBRE senior vice president and managing director Jason Kiselbach noted.
“The challenge for Vancouver is the lack of product, not purchasers,” a December market report by Altus Group added, assuring that the 2020 results will largely match the pace of stellar 2019, “with some upside potential for new home sales.”