New office space in Langford and Esquimalt combined with a busy leasing month in August held Victoria’s office vacancy rate at 7.3 per cent in the third quarter of the year according to Colliers Victoria’s latest office market report.
Colliers’ Tristan Spark said given how busy the sector was in the late summer the vacancy rate was expected to drop.
“I do believe we are going to be seeing a downward trend,” he said, noting there is a lot of local company expansion and interest in new space, while companies from the mainland are looking around the city.
The rate stayed at 7.3 per cent, where it was in the second quarter of this year, as 87,000 square feet of space came on the market through District 56 on Peatt Road in Langford and above the public library at Esquimalt Town Centre.
Spark’s expectation that the market could tighten up soon is spurred on by a couple of big players entering the Victoria market.
Video-game giant Electronic Arts Sports, which acquired Victoria’s Metalhead Software last spring, is looking for 20,000 square feet to expand the existing Victoria studio, while Pacific Blue Cross is shopping for 25,000 square feet.
Spark said at the same time regional companies are making moves.
“A lot of people are expanding and needing more space,” he said.
There is also a tinge of the pandemic affecting the market, as some companies look for larger spaces to better accommodate their staffs while maintaining social distance.
“There is some of that, but it’s probably not driving the trend,” Spark said. “Really it’s about the economy, it’s doing well and everyone seems to be really busy.”
Spark said a number of companies and governments have slowed down plans to bring their staffs back into the office, and that is likely to continue until next year.
According to the report, downtown vacancy decreased from 7.1 per cent from eight per cent while suburban vacancy increased to 7.6 per cent from 6.2 per cent between the second and third quarters.
It also noted office sales have heated up again as the vaccination rate rises. That has brought some stability for investors, leading to the sale of 31 Bastion Square for $12.95 million and 775 Topaz Ave. for $4.83 million.
The Victoria Press Building is preparing to add 128,000 square feet of Class A space next year, the Plexxis office building is creating nearly 60,000 square feet in Langford and Jawl Properties is building 16,500 square feet at 1025 Johnson St.
