Over the last few years, Vancouver’s downtown area has seen much intensified demand for commercial assets among retail companies.
This is especially apparent among luxury retailers, CoStar Group Canada senior market analyst (Vancouver) Jamil Jamani said in the company’s latest analysis of the market.
A large part of this is that the region has often served as a proving ground for these major brands prior to their North American expansions.
“Robson Street is facing increased interest, as well as Alberni Street,” Jamani told the Vancouver Sun in an interview. “You’re starting to see luxury retailers scatter not only in malls, but around downtown Vancouver.”
The region’s economic growth, which is likely to outpace the national level this year, is also impelling the trend.
Retail has been one of the Vancouver commercial property market’s strongest performers, with net absorption from July 2018 to July 2019 at 2.1 million square feet, CoStar stated.
By the end of that period, vacancy in the Lower Mainland’s retail market also dropped to a record low of 1.3%.
“That is extremely low,” CoStar senior market analyst (Vancouver) Jamil Jamani said. “If you look at any of the major malls — Oakridge, Metropolis at Metrotown, Pacific Centre — they are all fully occupied.”
The impact of these market forces has also been prominent in the city’s office segment, according to Avison Young’s report covering the first half of 2019.
A combination of growing demand from global tech giants and lengthy development times has led to a record-low 4.3% office vacancy level in Metro Vancouver. The previous regional record low of 4.7% was achieved back at the end of 2007.
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