Vancouver Office & Industrial Market Statistics - 4th Quarter 2023

Fourth-quarter data shows Vancouver's office and industrial markets registered another weak quarter highlighted by low leasing volumes and elevated levels of sublease space. While office continued its malaise, industrial took a further step down, a trend seen throughout much of the year. Similar to most office markets, Vancouver's office market is seeing only modest net new demand as companies respond to an increasingly uncertain economic landscape, and a clamp down on capital spending. Warehouse users also face restraints as signs of an economic slowdown become more evident. After seeing a significant tightening in monetary policy, businesses are being more selective around growth and expansion. Fourth quarter leasing activity was noteworthy, with both office and industrial recording the fewest quarterly transactions of the year; 30% to 40% below the five-year average.

At quarter-end, the Metro Vancouver office availability rate decreased by 10 basis points (bps) to register 12.2% but was up 1.7 percentage points from a year ago. Meanwhile, the much-observed downtown market saw total available space exceed 4.6 million square feet, more than three times the 1.5 million square feet recorded as available in Q1 2019. This, while the industrial availability rate increased by 30 bps to register 3.6%, a level last seen in early 2017. Office deliveries fell to just 42,000 square feet, while industrial completions were a robust 1.6 million square feet, although down from 2.2 million square feet completed in the third quarter. During the fourth quarter office rents increased by $0.48 per square foot to average $30.06 per square foot, while warehouse rents fell slightly to $20.90 per square foot.