Office space prices at some of the most highly centralized locations within downtown Vancouver’s Central Business District elapsed Calgary in 2015. According to a JLL study released in the fourth quarter of 2015, Vancouver’s Burrard Street had the second most expensive office rent in the country, coming second just after Toronto’s Bay Street.
The ranking pegged average prices on Bay Street at $68.19 per sq. ft., while Burrard Street was at $57.72 per sq. ft. – $2.68 lower than the 2014 price of $59.87 per sq. ft. Ottawa’s Queen Street ranked third at $49.34 per sq. ft. and Montreal’s Rene-Lesvesque West was fourth at $48.28 per sq. ft.
Burrard Street’s 2015 ranking represents a one-year one spot increase, replacing Calgary’s 8th Avenue which ranked second last year but tumbled down to fifth place due to the ongoing provincial economic crisis spurred by record low oil prices. This is reflected by the low demand for office space in Calgary: Prices on 8th Avenue have dropped from $59.06 per square foot in 2014 to $45.60 per square foot in 2015; vacancies are as high as 14 per cent, with rents at a near-decade low.
However, the price decrease in Vancouver can be attributed to an oversupply of office space as the city is currently in the midst of an office building boom. More than 4.5 million square feet of new office space is currently under development, and another cycle of 14 office developments totalling 3.6 million square feet have already received approval.
Some of the largest office tower projects completed in 2015 include: Telus Garden’s office tower (530,000 square feet), 745 Thurlow Street (400,000 square feet), MNP Tower (270,000 square feet), Manulife Building (250,000 square feet), 725 Granville Street at Pacific Centre (280,000 square feet) and Aquilini Tower (180,000 square feet).
Furthermore, an Avison Young report in June 2015 indicated that office vacancies in downtown Vancouver reached 10 per cent, the highest level since 2004.