Vancouver leading Canada in co-working office market growth: report

Oct 1 2019, 2:51 pm

Metro Vancouver’s co-working office space market has been leading major Canadian cities in growth, according to a new report by CBRE.

Since 2017, the same year WeWork entered the market, co-working office space in the region grew by 112%, with 913,000 sq. ft. added in absolute terms.

As of the second quarter of 2019, there is 1.732 million sq. ft. of co-working space in the region, accounting for 3.3% of total office space inventory. The average location size is relatively small at 21,700 sq. ft.

Downtown Vancouver, of course, accounted for most of the supply, with 1.04 million sq. ft. spanning 36 of the region’s 81 total locations.

WeWork is the largest co-working operator, with a regional share of 39% of the supply, totalling 678,000 sq. ft. of space across nine locations. This is followed by Regus/Spaces, accounting for 560,000 sq. ft. across 22 locations.

Both co-working giants have plans to open significant additional locations over the coming years; WeWork is opening an 80,000-sq-ft location at The Amazing Brentwood in Burnaby in 2020, and a 171,000-sq-ft location at the under-construction Bentall 6 office tower at 1090 West Georgia Street in 2023.

Spaces is also opening a 121,000-sq-ft location at the under-construction 400 West Georgia Street office tower next year.

There has been a vicious circle in the pace of growth of co-working spaces, with low office vacancies — reaching around 2% in downtown — fuelling the need for shared work spaces.

“Flexible real estate solutions are reshaping Vancouver real estate,” said Jason Kiselbach, senior vice-president and managing director of CBRE Vancouver, in a statement.

“In an office market with extremely low vacancy, co-working spaces are exacerbating low inventory, and we don’t see demand decreasing in the future. The co-working phenomenon is not going anywhere and our projections are for significant future growth.”

The market with the second highest growth was Calgary, with a 100% increase in co-working space since 2017 — up by 460,000 sq. ft.

This is followed by Ottawa (82%), Toronto (73%), and Montreal (60%).

In absolute terms, Toronto leads growth with 1.3 million sq. ft. of space added across 54 new locations over the last two years.