Vancouver’s office vacancy rate continues to rise amid high construction activity, with approximately 1 million square feet of office space available in early 2014 (up from 633,000 square feet in 2013).

“We expect that vacancy rates will continue to climb as the new office space begins to be delivered to the marketplace,” says Jon Bishop, vice president and managing principal of Devencore Company Ltd. “We also expect that rental rates, especially in older properties, will be under pressure. Because specific older Class ‘A’ and Class ‘B’ spaces will be vacated as tenants move into the new towers, the best deals in the months ahead will generally be landlord or building specific.”

According to Newmark Knight Frank Devencore’s latest study, more than two million square feet of office space is currently under construction in downtown Vancouver. Another 4 million square feet is underway in the surrounding region.

In addition to a rising vacancy rate, which currently sits at 5.5 per cent, the study predicts a number of other trends for British Columbia’s largest city.

“We’re also seeing more large blocks of space returning to the market than we have in many years, and a rise in sublease space availability,” adds Bishop. “As a result, some landlords – particularly those who have older Class ‘A’ and Class ‘B’ buildings – are beginning to market their properties much more aggressively.”