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Amazon is set to move into offices on the site of the old Canada Post building in Vancouver.

DARRYL DYCK/The Globe and Mail

Amazon.com Inc. is ramping up a major expansion in Vancouver with a deal to triple the size of its planned office space in the city’s core to 1.1 million square feet.

The e-commerce and cloud services giant will take up an entire city block by leasing two new office towers under construction in a development called The Post, named for its location on the site of Vancouver’s old Post Office building. That will make Amazon the largest corporate tenant in Vancouver, providing space for thousands of technology workers.

Seattle-based Amazon initially agreed to lease 35 per cent of the space in the two new office towers. Now, it will lease both office buildings, according to people with knowledge of the matter, tripling its footprint. The Globe and Mail has granted anonymity to the sources because they were not authorized to speak publicly.

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This deal marks Amazon’s first sizable corporate expansion in Canada since it abandoned plans to build a second headquarters in New York in favour of boosting its presence in a number of other urban centres in North America. After backing away from New York in February, Amazon said it would create two major office hubs in northern Virginia and Tennessee, and add employees across its 17 corporate offices and tech centres in the United States and Canada.

The e-commerce company has offices in Toronto, Montreal and Vancouver, as well as distribution warehouses across the country.

In Vancouver, it is using just over 300,000 square feet, according to commercial realtors. It employs more than 1,000 engineers and researchers who work on e-commerce and Amazon Web Services, according to the most recent data from the company.

The company has said it plans to expand to 5,000 corporate employees in Vancouver. It is unknown whether the additional space in The Post means Amazon will further bolster its work force beyond that. An office property with 1.1 million square feet can house 10,000 employees, industry experts estimate.

Vancouver Mayor Kennedy Stewart said a boom in tech hiring with a company such as Amazon can boost incomes, as well as the economy. But he said the painful lessons learned from San Francisco and Seattle have been that that kind of expansion also exacerbates housing affordability problems. Vancouver is the most expensive housing market in the country.

“It’s a double-edged sword. And I think for Vancouver, this is just the beginning,” he said.

The Post buildings, at 21 storeys and 22 storeys, would be the city’s largest new office complex; they are set to open in 2022 and 2023. QuadReal, a real estate company owned by British Columbia Investment Management Corp., B.C.'s public-sector pension fund, is developing the old post office, which will include 200,000 square feet of retail on the ground floor.

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QuadReal declined to comment. A spokeswoman for Amazon declined to comment.

In addition, Amazon is taking space in a new property next to The Post, although that building is much smaller with nine storeys.

The Amazon deal is larger than others announced by tech companies recently. In Vancouver, mobile gaming company Kabam agreed late last year to lease 105,000 square feet and Microsoft Canada agreed to take 69,400, according to a report from commercial realtor CBRE.

It will also dwarf other corporate tenants once The Post is built. Vancouver has traditionally been home for natural resources companies and satellite offices for big financial institutions such as RBC. But financial-services companies have scaled back, and the typical law firm uses about 60,000 square feet, according to realtors.

Meanwhile, the growth of tech companies and co-working company WeWork has driven office vacancy rates to a record low, sent rental rates soaring and spurred nearly 20 new office developments.

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