The outlook for office leasing in Western Canada next year is a tale of two provinces, according to CBRE’s 2016 forecast for commercial real estate in Canada.
Despite vacancy rates climbing across most of the country following a prolonged landlord’s market, Vancouver’s fortunes will continue to trend upward with office occupancy rates in both central and suburban areas increasing by 0.1 and 0.6 percentage points respectively, the forecast says.
This prediction is largely because of the market working through the 2.4 million square feet of new office space that was delivered this year. And while vacancy rates will remain elevated at 11.2 per cent across both downtown and greater Vancouver locales, interest from the tech sector and professional services should help balance less-than-ideal demand from the resource sector.
It’s a very different story across the Rockies in Edmonton and Calgary, where office vacancy rates will be up as much as 4 percentage points in the Alberta capital, with a slightly softer rise of 1.4 for its neighbour to the south, the forecast says. According to CBRE, Edmonton’s problematic outcome is geared to limited absorption in the downtown core and pending oversupply, with prospective tenants waiting for 1.8 million square feet of new inventory to come available in 2018.
For Calgary, on the other hand, job cuts and capital expenditures are mounting, meaning office vacancies should continue to rise, particularly in the downtown, before levelling off around the third quarter.Report Typo/Error