The cost to rent high-end office space in downtown Vancouver climbed by 16.1 per cent in the first quarter of this year, marking the largest price increase among North and South American markets, a new report says.
The year-over-year increase to downtown Vancouver’s prime office occupancy costs led the likes of downtown Manhattan and downtown Toronto, according to CBRE’s annual Global Prime Office Occupancy Costs report. The prime office occupancy costs include rent, local taxes and service charges that tenants are charged for an office space.
While downtown Vancouver saw the largest year-over-year price increase to $62.83 per square foot per year, it remains cheaper than downtown Toronto ($73.69) and similar-sized markets such as Geneva ($108.54), Melbourne ($75.94), and Dublin ($125.71).
Downtown Vancouver experienced the fourth-highest price growth for high-end office space worldwide, trailing only Durban, South Africa, Bangkok and Marseille, the report said.
The average growth rate for the Americas was 3.2 per cent, said Norm Taylor, CBRE’s executive vice-president and managing director in Vancouver.
“You can see that’s substantial rent escalation,” he told Postmedia in an interview. “There is some sticker shock to it. That’s a very significant growth level year-over-year.”
He said Vancouver still lags the top cities of world in terms of rent escalation, despite the big year of growth. (Hong Kong topped the list as the most expensive market for prime office space at $401.81 per square foot, per year).
“When you compare Vancouver on the international scale of cities, we don’t make the top 50, and were still cheaper than Toronto,” he said.
“But we’re definitely moving up,” Taylor said. “When we’re growing as the fastest-growing rental market in North America and fourth fastest in the world, we’re definitely making up ground, from an ownership perspective.”
It’s a good news story for landlords and office property investors, but troubling news for tenants, Taylor …read more
Source:: Vancouver Sun – Business