Vancouver office vacancy maintained an upward trend as it rose to 8.8% in the first quarter of 2024, says a Colliers report.

The increase marked a 230-basis-point rise from the first quarter of 2023.

“As a result of rising vacancy and reduced demand for office space, many proposed developments have been placed on hold for re-evaluation or chosen to wait to break ground until sufficiently prelease, rather than proceed on a speculative basis,” said Colliers.

Tenants continued to favour sublease space due to historically high fit-out costs and ongoing uncertainty surrounding utilization rates. As result, headlease space remained on the market as options.

A City of Vancouver industrial zoning bylaw change has allowed for more diverse office uses in mixed-use industrial and office products, giving tenants more office location options.

While potential office conversions are generating buzz, they represent a “very small” number of projects in Canada. And, the Metro Vancouver market has limited opportunities or need for conversions due to the size of the office market.

And despite the increase, Vancouver’s office vacancy rate is the lowest in Canada.

A Colliers team led by Associate Research Director Susan Thompson authored the report.

Photo: Colliers