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Market Report

Vancouver Office Market Report

2Q 2024

Surge in New Supply Softens Sector Fundamentals;
New Zoning Bylaw Diversifies Product Offerings

Vacancy to remain on upward trajectory. Vancouver’s office vacancy rate continued to rise last year. While new supply fell by more than 50 per cent, net absorption dropped into negative territory, causing the share of vacant space to rise above 9.0 per cent. Downtown remained a weak spot, with its vacancy rate hovering above 12 per cent, as the submarket has welcomed the most new supply. In contrast, the suburban and peripheral submarkets saw more stable fundamentals, with relatively better occupancy throughout the year. Demand for quality space remains healthy, however, as more than 70 per cent of future supply in the downtown area has been pre-leased. Driven by an increase in new supply expected outside the downtown core, total completions are forecast to rise. This influx will hit the market at a time when overall office demand is impacted by elevated interest rates, putting upward pressure on vacancy. However, as Western Canada’s main commercial hub, Vancouver will likely continue to hold the lowest office vacancy rate among major metros.
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