Vancouver commercial property investment appears headed for another robust year due to strong fundamentals in the office, industrial and retail markets that are fuelling record-low vacancies and never-seen-before rental rates, according to CBRE’s national 2019 market outlook.
Norm Taylor: Local, national and international capital is all chasing yield, and specifically, a lot of it is real estate yield. When investors are looking to place money and are craving yield, they look for markets that have strong fundamentals … for growth, and Vancouver one of those markets. NT: We’re already looking at developing buildings or adapting what we traditionally build for industrial buildings to potentially multi-level because of the land constraints. We have to make maximum efficiency out of the land that we have, and with rents going up, the market can sustain that because the market has matured. Vancouver is now an international city. We’ve got major corporations that have set up here and are established here and they can afford to pay higher rents and they are.
NT: Taxing on highest and best use — I don’t think that is fair for both the owner of the property, nor is it fair to the tenants within the property. If the rents are fixed on a contract and if you’re going to charge the taxes on something that doesn’t exist — but in theory, it’s zoned for that — you’re taxing on the hypothetical and that’s just not sound. That’s not market value. That’s not a fundamental.
ED: Your brokerage has said there could be 30,000 additional workers in downtown Vancouver over the next three years due to the expansion of tech firms including Amazon, Kabam and Facebook. Can the city handle that many more workers? ED: I rarely hear anything but optimism from brokers like yourself and from developers in this city about the future of the market. Let’s be real for a second, what scares you about where our commercial property market is heading?
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