Rapid transit drives metro Vancouver’s suburban office market
In the robust Metro Vancouver suburban office market, proximity to rapid transit has become a key market driver. Office locations within 0.5 km of rapid transit stations have a vacancy rate almost one third of areas which are not served. Office landlords have the upper hand in the well-served locations and developers are looking to build more transit-oriented suburban office complexes says the inaugural Vancouver Rapid Transit Office Index, issued by Jones Lang LaSalle.
“Transit is becoming increasingly important in Metro Vancouver,” said Jones Lang LaSalle executive vice president Ray Ahrens. “Our Rapid Transit Office Index shows clear evidence that office developments located within walking distance of rapid transit have a significant advantage with less vacancy and higher rents. The direct vacancy rate for buildings within 0.5 km of a rapid transit station is 4.8 per cent compared to 12.3 per cent for the rest of the suburban market, and the average asking rents are approximately 8 per cent higher.”
“As Downtown and Broadway Corridor availability decreases and rents increase, our landlord and tenant clients are becoming more interested in transit-oriented suburban locations,” said Ahrens. Some new developments such as Broadway Tech Centre are serving this growing demand and more are planned including The Brewery District and Merchant Square in New Westminster and Phase II of the Renfrew Business Centre in Vancouver Outlying.
“We expect to see continued interest in these developments, particularly from employers with back-office operations that do not need to be located Downtown,” said Ahrens.
“Not only do office occupiers derive direct benefits from being close to rapid transit, but office buildings located near SkyTrain or Canada Line stations also achieve higher rents than other locations,” said Jones Lang LaSalle Research Associate Scott MacDonald.
“Our research shows that tenants are willing to pay a premium for daily access to public transport and we have seen this throughout Suburban Vancouver. Office building owners are not only able to achieve higher rents, but also lower vacancy rates in local markets, contributing to higher overall real estate values. A great example of this is fully-leased Central City in Surrey,” he concluded.