Vancouver Office Market Report

Office market outperforming other major metros. Vancouver has been Canada’s only major metro to experience positive net absorption in each of the past two years. This has caused the region to hold the lowest office vacancy rate, and be one of the tightest markets in North America as of the end of the first quarter. However, vacancy has remained on an upward trajectory as a historic amount of new supply enter the market over the past two years, with 2022 being a record year. Large blocks of older, more obsolete space are now sitting on the market for longer periods of time, and sublet space continues to trend up as the metro is experiencing the flight-to-quality trend witnessed across the country. As a result, 70 per cent of this new supply was pre-leased as tenants continue to value highly-amenitized space in order to lure employees back to the office, which capped upward pressure on vacancy. Many owners of older assets are now beginning to invest capital into these properties in order for them to remain competitive.