Move over, Manhattan: Vancouver’s downtown office occupancy costs are rising faster than those in New York City’s financial district and everywhere else in North America, according to a global survey released July 3 by commercial broker CBRE.
Downtown Vancouver prime office occupancy costs increased by 16.1% this year, representing the largest price increase in North America, followed by downtown Manhattan and downtown Toronto, the CBRE’s survey of premier office space found.
Despite the increase, Vancouver’s prime office space remains much less costly than in Midtown Manhattan, where top office space leases for US$183 per square foot, compared with US$47.95 per square foot (C$63) in Class A downtown Vancouver towers. In downtown Toronto, such top office space leases for US$56.24 (C$74) per square foot.
“Although prices have escalated, downtown Vancouver is still not in the top 50 most expensive cities globally and trails downtown Toronto,” said Norm Taylor, executive vice-president and managing director for CBRE Vancouver. “This increase in rental rates means local tenants and businesses will need to look ahead and budget respectively for the next three years when new supply will begin to provide some relief.
“We expect rental rates to continue to increase as demand shows little sign of retreat and there is no new supply expected until 2021. We have a robust office market that is short on supply [and] heavy on demand.”
Central Hong Kong remained the most expensive office market in the world, with overall prime occupancy costs of US$307 per square foot per year, followed by London’s West End (US$235), Beijing’s Finance Street (US$201), Hong Kong Kowloon (US$190) and Beijing’s Central Business District (US$189).