Q1’s total square footage under construction of 4.6 million sq. ft. sits well above the 5-year-average of 3.4 million sq. ft.. Construction activity continues to push out towards the suburbs, with 2.2 million sq. ft. (46.8%) currently being built in the municipalities of Delta and Surrey.
Of all speculative space currently under construction, 61.1% has already been pre-committed, forcing occupiers to consider existing space that may not be as functional for their business.
Average net asking lease rates in Metro Vancouver continue to rise, now at $10.90 per sq. ft.. Taxes & operating costs (now at $4.12 per sq. ft.) have breached the $4.00 average for the first time.
Availability rates encountered no change quarter-over-quarter; however, vacancy rates fell 10 bps from last quarter to reach 1.6%. Occupiers are feeling the crunch, now more than ever with vacancy rates having fallen for the past 8 consecutive quarters.