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Office vacancy remains high, but ‘milestone’ reached
Richmond continued to lead the region in empty office space last year, but demand is growing, according to a new Metro Vancouver market report from Avison Young.
Richmond’s vacancy rate at the end of 2012 stood at 19.3 per cent, well above the region’s 7.0 per cent average.
Of Richmond’s 4,196,438 square feet of office space, 808,624 square feet remained vacant last year. But demand did grow, as the city boasted 110,703 square feet of positive absorption for the year—the strongest level of annual absorption since 2008 and the third highest rate in the region.
According to the real estate firm’s report, vacancy in Richmond’s office market dropped below 20 per cent for the first time since mid-2009. Avison Young principal Bill Elliott called that a “milestone of sorts.”
“While much of the activity has been tenant churn within the market, more than 110,000 square feet of positive annual absorption in 2012 is a welcome turn of events and expected to continue,” he said in a news release.
Richmond’s vacancy rate reached a peak of 24.6 per cent at the end of 2010.
With 1-in-5 offices still sitting empty, developers have been slow to build more. Avison Young suggested Vancouver Airport Authority’s proposed Sea Island Business Park—800,000 square feet of office space and a hotel—could be the first new project to proceed. Ampar Ventures is also planning a multi-phase development near the Oak Street Bridge that will include a 12-storey office tower and two hotels.
The only city with a higher vacancy rate was New Westminster, at 20.8 per cent. But Avison Young noted that was due to 225,400 square feet of space added to the city’s inventory at year’s end, and it’s set for occupancy this year.