Falling suburban office vacancy expected to drive investment throughout 2018
In Vancouver’s increasingly hot office market, CBRE’s Canada Q1 2018 Quarterly Statistics Report shows that improving fundamentals in the city’s suburban market are driving investor confidence. Suburban office sales led the market by a significant margin in Q1 2018, with our team closing on 14 suburban office buildings in the first three months of this year, compared to eight in all of 2017. In the same quarter, the suburban office market experienced a 150-basis point drop in vacancy rate to 8.1%, the lowest it’s been since Q2 2001, and an increase in rental rates for five of the city’s seven sub-markets.
“We expect the rising investor demand trend in the suburbs to continue as falling vacancy rates will result in lease rate growth,” said Tony Quattrin, our Vice Chairman. “Interest from domestic and foreign investors remains strong for the suburban office market, particularly along suburban transit stations, supporting continued strong values in these areas. In fact, investors in the suburban office market are seeing returns up to 40% higher than downtown Vancouver.”
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