Victoria’s office market remains stable and quiet as a result of the ongoing COVID-19 pandemic according to a market report released this week.
The third-quarter report from Colliers International notes the vacancy rate in Victoria’s office market remained stable at 5.9 per cent, the same number reported in the second quarter of this year, though there was an increase in vacancy in the downtown core.
The report said with more companies rethinking office space and more people working from home, there has been movement away from downtown space. The vacancy rate downtown is 6.7 per cent, up from 6.1 per cent in the second quarter.
The suburban office vacancy rate dropped to 4.9 per cent from 5.7 per cent in the second quarter.
According to Colliers, Victoria’s overall stability is due to the sheer size of the public sector and the amount of office space the federal, provincial and municipal governments take up.
The report said the climate remained quiet through the summer and into the fall as many companies have indicated they will hold off major decisions on expansion, downsizing or moving offices until they better understand what a second wave of the pandemic might look like.
The work-from-home trend is expected to continue and that could lead to increased vacancy rates as many firms, and government, decide if they need traditional office space long-term, the report said.
However, that could be balanced by the need for larger office spaces to ensure physical-distancing.
In terms of office investment, the report also suggested it has been quiet due to the pandemic.
Investment in office space, by transaction volume, dropped by 35 per cent over the first nine months of this year compared with 2019.
Colliers said with too much uncertainty, would-be buyers are content to stand on the sidelines for the time being.