VANCOUVER - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that the office market in downtown Vancouver continues to be in a state of transition. Vacancy rates in Class ″A″ office buildings remain among the lowest in the country, at approximately 3%, but achieved rental rates have been easing off slightly from historically high levels.
"There are a number of reasons for this," said Jon Bishop, Vice-President & Managing Principal of Devencore Company Ltd. "Vacancy rates have edged up slightly over the past year and larger tenants are entering the market 18-24 months prior lease expiry, allowing them to take advantage of both new development and subsequent back fill space as a strong level of pre-leasing continues at the buildings currently under construction. Tenants can take advantage of these market conditions and benefit from improving economic packages that may be available today by thoroughly reviewing their options with their advisors and beginning the real estate process earlier than they might otherwise do so."
The NKF Devencore study also notes that market circumstances will continue to shift over the next few years as there are a number of major developments underway and in the planning stages that, taken together, will increase the downtown inventory of top-quality space by more than 2 million square feet. However, none of this new space will be available for occupancy before 2014, and other potential projects that are still in the pre-development phase will only arrive on the market 12-24 months after that.
"Demand today outstrips supply in the current marketplace, but conditions are changing as the new developments under construction are pre-leased and delivered," Mr. Bishop said. "Even though the market is particularly tight at the moment, it is still possible for both tenants and landlords to secure lease deals that are mutually beneficial. Understanding this dynamic can be extremely useful when it comes time to negotiate."
Corporate real estate markets across the rest of the country showed a slower pace of growth through 2012 and into the first months of 2013. The overall vacancy rate in office spaces in Canada's major cites has fallen from 4.7% to 4.5%, and the amount of available space declined by approximately 245,000 square feet. Approximately 9.6 million square feet of office space is currently available for lease or sublet in the country's downtown areas.
About Newmark Knight Frank Devencore
As part of Newmark Grubb Knight Frank, one of the world's leading commercial real estate advisory firms, Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage, exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world's leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, Newmark Grubb Knight Frank's strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.
For further information, contact:
Director, Marketing and Communications
514-392-1330, ext. 225
Newmark Knight Frank Devencore
Devencore Ltd., Real Estate Agency
Jon T. Bishop
Vice-President & Managing Principal
Devencore Company Ltd.
604-681-3334, ext. 2225
Newmark Knight Frank Devencore