What’s in store for Vancouver’s commercial real estate market in 2021?
According to Avison Young, the commercial real estate market in Vancouver, especially the office segment, is well positioned to benefit from the economic recovery expected in the second half of 2021, according to Avison Young.
While the unprecedented crisis from COVID-19 proved devastating to almost all asset classes, the pandemic had a positive impact on Vancouver: providing the space the regional office market needed to “achieve a balanced market for the first time since 2016”, Avison said Young.
The trends were particularly evident in the inner city center, where most of the B / C properties in the “small to medium-sized vacancies” category could be seen.
“Similar trends were evident across Metro Vancouver, where the inner suburbs saw only a minimal year-on-year increase in vacancies and a slightly negative annual absorption in predominantly class B / C properties, while the outer suburban markets in the region had a comparatively high annual absorption and had historically close vacancy rates in 2020, ”reported Avison Young.
The city’s commercial vacancy rate rose from 4.4% at the end of 2019 to 7.5% at the end of 2020. However, the regional vacancy rate remained comparatively low and was still below the record of 8% at the end of 2017.
“While the regional vacancy rate is expected to increase slightly in 2021, a balanced market is still expected,” predicted Avison Young, citing the promise of the federal government to provide COVID-19 vaccinations to most Canadians by September 2021.
“Renewed optimism, accompanied by a widely forecast resumption of activity, is expected to accelerate the return of workers to office and stimulate real estate decision-makers to act,” said Avison Young.
“A reversal of the impact of pandemic-related measures and precautionary measures is expected to take hold in the second half of the year with a corresponding improvement in metrics such as vacancy and absorption.”