Downtown Vancouver Records the Largest Price Increase in North America for Prime Office Space

Cost to rent space in downtown Vancouver remains cheaper than downtown Toronto

Vancouver, BC – July 3, 2018 — Downtown Vancouver prime office occupancy costs increased by 16.1% this year, representing the largest price increase in North America, followed by downtown Manhattan and downtown Toronto, according to CBRE’s annual Global Prime Office Occupancy Costs report. Prime office occupancy costs reflect rent, plus local taxes and service charges for the highest-quality, prime office properties. 

However, while downtown Vancouver saw the largest price increase to USD $47.95 per sq. ft., it remains cheaper than downtown Toronto (USD $56.24 per sq. ft.) and similar-sized international markets such as Geneva (USD $82.83 per sq. ft.), Melbourne (USD $57.95 per sq. ft.), Dublin (USD $95.93 per sq. ft.) and Taipei (USD $71.94 per sq. ft.). Internationally, downtown Vancouver is the fourth fastest cost growth market for prime office space, following Durban, South Africa, Bangkok and Marseille.

“Although prices have escalated, downtown Vancouver is still not in the top 50 most expensive cities globally and trails downtown Toronto,” said Norm Taylor, Executive VP and Managing Director for CBRE Vancouver.  “This increase in rental rates means local tenants and businesses will need to look ahead and budget respectively for the next three years when new supply will begin to provide some relief.” 

“For investors, these increases offer a great opportunity because we expect rental rates to continue to increase as demand shows little sign of retreat and there is no new supply expected until 2021. We have a robust office market that is short on supply, heavy on demand and a strong provincial economy. The fundamentals are solid for investors buying office buildings in Vancouver,” said Taylor.

Hong Kong Central remained the most expensive office market in the world, with overall prime occupancy costs of US$307 per sq. ft. per year, followed by London West End (US$235 per sq. ft.), Beijing Finance Street (US$201 per sq. ft.), Hong Kong Kowloon (US$190 per sq. ft.) and Beijing Central Business District (US$189 per sq. ft.). 

Global prime office occupancy costs rose 2.4%year-over-year, with the Americas up 3.2%, EMEA up 2% and Asia Pacific up 1.7%. CBRE expects global office occupancy costs to increase by approximately 2% in the year ahead.

“The dominant trend among markets with notably rising prime occupancy costs is strong demand from the finance, technology and e-commerce sectors,” said Richard Barkham, global chief economist at CBRE. “Markets with declining occupancy costs are primarily affected by supply/demand imbalances resulting from new completions. Since reduced costs due to excess inventory tend to be relatively short-lived, companies looking for space in those markets should move quickly.”

Top 10 Most Expensive Markets
(In US$ per sq. ft. per annum; as of Q1 2018)

Rank Market Occupancy Cost
1 Hong Kong (Central), Hong Kong 306.57
2 London (West End), United Kingdom 235.01
3 Beijing (Finance Street), China 200.91
4 Hong Kong (Kowloon), Hong Kong 189.56
5 Beijing (CBD), China 189.44
6 New York (Midtown Manhattan), U.S. 183.78
7 New York (Midtown-South Manhattan), U.S. 171.56
8 Tokyo (Marunouchi/Otemachi), Japan 171.49
9 New Delhi (Connaught Place - CBD), India 153.26
10 London (City), United Kingdom 144.95

Fastest Annual Changes
Occupancy Costs

(In local currency and measure; as of Q1 2018)

Top 5 Global Increases

Rank Market % Change
1 Durban, South Africa 21.4
2 Bangkok, Thailand 16.9
3 Marseille, France 16.7
4 Vancouver (Downtown), Canada 16.1
5 Oslo, Norway 15.1

Top 5 Canadian Increases

Rank Market % Change
1 Vancouver (Downtown) 16.1
2 Toronto (Downtown) 12.3
3 Toronto (Suburban) 2.8
4 Montreal (Downtown) 2.4
5 Calgary (Downtown) 1.3

Visit the report for the full list of the Top 50 Most Expensive Markets​.

​​​​​​
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com

In Canada, CBRE Limited employs 2,200 people in 22 locations from coast to coast. Please visit our website at www.cbre.ca​

​​​​​​​​​​