Metro Vancouver's commercial real estate market remains stable, according to the latest CBRE Ltd. reports.
The company's second-quarter industrial report for the region noted that the overall availability rate of industrial property remained unchanged from the first quarter's 7.3%. The regional vacancy rate rose 30 basis points to 4.7% but has risen from a two-year low reported in the first three months of the year.
Leasing activity has picked up in 2012 after a slowdown in 2011's latter half as distribution and logistics companies have had a surge in confidence with exports up 10.5% year over year in April and freight shipments through Port Metro Vancouver rising 12.8% in May.
Meanwhile, the region's office market has experienced a minor increase in vacancy and negative absorption as business confidence continued to moderate over continued global economic concerns. While the region's office vacancy rate edged up 40 basis points to 8%, key markets remain tight. Vacancy rates for triple-A office space downtown remains at record lows of 0.7%, and second-quarter single-A office space was at 1.8%.
Leasing activity in the region has remained stable, with gross leasing of 664,190 square feet in the quarter, a bit more activity than in the year's first quarter. But CBRE's office market report predicted activity in the rest of the year will remain muted with economic uncertainty affecting demand, primarily in the suburban office market, where large tenant deals have declined.
However, the region's new inventory continues to expand significantly. Nearly a million square feet of new industrial property has been built, and 2.2 million square feet of office space is under construction.
In the retail space, mall owners and developers remain optimistic about the local market as 4.8 million square feet of retail space is being added in the region over the next few years. (See "12 malls in retail renaissance" – BIV issue 1190, August 14-20.) •
