2012 Global Market report - NAI Global
2012 Global Market report - NAI Global
2012 Global Market report - NAI Global
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Vancouver, British Columbia, Canada<br />
Victoria, British Columbia, Canada<br />
Contact<br />
<strong>NAI</strong> Commercial<br />
Vancouver<br />
+1 604 691 6643<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Vancouver is the largest city in British Columbia and the third<br />
largest city in Canada. Metro Vancouver is home to 2.4<br />
million people. It is one of the largest ports on the west coast<br />
and a gateway to Asia. Signs point to a modest recovery<br />
continuing through <strong>2012</strong>. Without more robust growth in the<br />
US, the British Columbia economy will grow at a respectable<br />
2.5% to 3.0% rate annually.<br />
The commercial property market has normalized with<br />
average cap rates mostly below 7% regardless of product<br />
type. The region continues to be an attractive place to live,<br />
operate a business or own commercial property. The office<br />
market has experienced positive absorption in 2011 resulting<br />
in an overall vacancy rate declining from 8% to 7%. The<br />
downtown market is very tight, the result of no new office<br />
supply since 2007. The vacancy in the CBD is about 4%,<br />
the lowest of any North American city. Three new office<br />
towers are in pre-leasing which should address the supply<br />
situation in the coming years. Meantime the suburban<br />
markets are the beneficiary.<br />
The industrial market can be characterized as stable. Overall<br />
vacancy is about 5% in the region. The tenant market has<br />
been weaker than expected in 2011. Lease rates range<br />
between $6.50 and $8.50/SF largely unchanged from last<br />
year. Land prices average $1.0 million per acre of land. With<br />
economic growth approximating 2.5% per annum we expect<br />
a strengthened tenant market in <strong>2012</strong> with corresponding<br />
modest increase in rental rates and land values.<br />
The retail market is coming off a very robust 2010. While<br />
the investment appetite remains strong there are fewer<br />
quality assets available, resulting in much lower transaction<br />
volume in 2011. Lease rates will remain stable, supported<br />
by overall economic growth, increased housing starts and<br />
slow but steady employment growth.<br />
The investment market has returned to near normal<br />
transaction volumes. REITs are flush with cash. Institutional<br />
owners are rebalancing portfolios and high-net worth<br />
investors continue to be attracted to this supply constrained<br />
west coast market. The multifamily market is particularly<br />
strong with cap rates below 5% in most sub-markets in<br />
the city and between 5% and 6% in the suburban areas.<br />
Transaction activity for 2011 was steady with improvement<br />
expected in <strong>2012</strong> resulting from continued low interest rates<br />
and population growth in the region.<br />
Contact<br />
<strong>NAI</strong> Commercial Victoria<br />
+1 250 381 2265<br />
Country Data<br />
Area (Sq Mi)<br />
GDP Growth<br />
GDP 2011 (US$ B)<br />
GDP/Capita (US$)<br />
Inflation Rate<br />
Unemployment Rate<br />
Interest Rate<br />
Population (Millions)<br />
3,855,100<br />
2.7%<br />
$1,632.89<br />
$47,340.29<br />
2.0%<br />
7.5%<br />
1.0%<br />
34.493<br />
Victoria, the capital city of British Columbia, has five<br />
primary economic drivers that include the provincial seat of<br />
government, the University of Victoria, high technology,<br />
tourism and the Department of National Defense, which<br />
operates Canada’s largest naval base on the Pacific coast.<br />
Since the fall of 2008 when the financial crisis swept across<br />
North America and the rest of the world, two of the major<br />
economic drivers, government revenue and tourism, have<br />
been negatively impacted.<br />
The office market has begun an uneven recovery after three<br />
years of increasing vacancy rates. The suburban office<br />
market has seen private sector growth, particularly from<br />
high tech firms, filling spaces vacated by the public sector.<br />
The supply of new office space has continued to be stifled<br />
by existing inventory (Uptown) and limited new demand for<br />
Class A space. Over-all office vacancy rate is expected to<br />
continue to trend downwards but will remain above historical<br />
levels (9% downtown and 8% in the suburbs). Lease rates<br />
are expected to remain stable.<br />
The industrial market is slow but steady demand and limited<br />
new supply will result in below 2% vacancy rate in the<br />
downtown industrial areas and about 5% in the suburbs.<br />
Land values have held steady contributing to stable<br />
industrial rents. Due to lack of additional capacity and<br />
low vacancy in established industrial areas (particularly<br />
downtown), growing businesses will continue to look for<br />
expansion options outside downtown Victoria.<br />
The retail market in the downtown core has shown weakness<br />
due to the anemic economic recovery and continued<br />
softness in the important tourism sector. The restaurant sector<br />
was hard hit by new minimum wage legislation, tightened<br />
drinking and driving regulations and the introduction of the<br />
Harmonized Sales Tax (HST) to restaurant meals. Vacancy<br />
rates in the CRD (Capital Region District) are expected to<br />
hold steady at around 7%. Regional and community retail<br />
centers in Greater Victoria experience a healthier 2% to 3%<br />
vacancy rate. Lease rates have remained stable.<br />
The Investment market in Greater Victoria continues to be<br />
frustrated by a lack of sellers. Low interest rates, a volatile<br />
stock market and an over-supply of qualified purchasers<br />
chasing the limited number of available investment grade<br />
properties will keep cap rates down. Cap rates on prime<br />
commercial properties have remained unchanged at 6% to<br />
7% with multifamily apartments unchanged at around 5%.<br />
Vancouver At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 35.00 CAD 50.00 $ 34.65 $ 49.50 5.00%<br />
CAD 28.00 CAD 38.00 $ 27.72 $ 37.62 6.00%<br />
CAD 25.00 CAD 35.00 $ 24.75 $ 34.65 8.00%<br />
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 10.00%<br />
CAD 25.00 CAD 32.00 $ 24.75 $ 31.68 12.00%<br />
CAD 18.00 CAD 25.00 $ 17.82 $ 24.75 14.00%<br />
CAD 6.00 CAD 9.00 $ 5.94 $ 8.91 4.50%<br />
CAD 6.50 CAD 10.00 $ 6.44 $ 9.90 4.50%<br />
CAD 8.50 CAD 14.00 $ 8.42 $ 13.86 5.00%<br />
CAD 100.00 CAD 200.00 $ 99.01 $198.02 5.00%<br />
CAD 25.00 CAD 65.00 $ 24.75 $ 64.36 5.00%<br />
CAD 30.00 CAD 40.00 $ 29.70 $ 39.60 5.50%<br />
CAD 25.00 CAD 40.00 $ 24.75 $ 39.60 6.00%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
Retail/Commercial Land<br />
Residential<br />
CAD 3,267,000.00 CAD 5,880,600.00 $3,234,765.60 $ 5,822,229.60<br />
CAD 900,000.00 CAD 1,200,000.00 $ 891,089.11 $ 1,188,118.81<br />
CAD 850,000.00 CAD 1,200,000.00 $ 841,584.16 $ 1,188,118.81<br />
CAD 750,000.00 CAD 1,100,000.00 $ 742,574.26 $ 1,089,108.91<br />
CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71<br />
CAD 750,000.00 CAD 1,300,000.00 $ 742,574.26 $ 1,287,128.71<br />
Victoria At A Glance<br />
conversion 1.01 cad = 1 us$ NET RENT/SF/YR US$ NET RENT/SF/YR<br />
low High low High Vacancy<br />
doWntoWn offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
suburban offIce<br />
New Construction (AAA)<br />
Class A (Prime)<br />
Class B (Secondary)<br />
IndustrIal<br />
Bulk Warehouse<br />
Manufacturing<br />
High Tech/R&D<br />
retaIl<br />
Downtown<br />
Neighborhood Service Centers<br />
Community Power Center<br />
Regional Malls<br />
Solus Food Stores<br />
CAD 40.00 CAD 45.00 $ 39.60 $ 44.55 10.00%<br />
CAD 36.00 CAD 40.00 $ 35.64 $ 39.60 6.50%<br />
CAD 30.00 CAD 36.00 $ 29.70 $ 35.64 8.10%<br />
CAD 38.00 CAD 42.00 $ 37.62 $ 41.58 15.00%<br />
CAD 32.00 CAD 36.00 $ 31.68 $ 35.64 8.50%<br />
CAD 26.00 CAD 30.00 $ 25.74 $ 29.70 9.00%<br />
CAD 10.00 CAD 12.00 $ 9.90 $ 11.88 3.00%<br />
CAD 12.00 CAD 14.00 $ 11.88 $ 13.86 2.00%<br />
CAD 12.00 CAD 18.00 $ 11.88 $ 17.82 2.50%<br />
CAD 45.00 CAD 90.00 $ 44.55 $ 89.11 6.00%<br />
CAD 30.00 CAD 42.00 $ 29.70 $ 41.58 4.00%<br />
CAD 25.00 CAD 30.00 $ 24.75 $ 29.70 2.00%<br />
CAD 60.00 CAD 75.00 $ 59.41 $ 74.26 4.00%<br />
N/A N/A N/A N/A N/A<br />
deVeloPment land low//acre High/acre low/acre High/acre<br />
Office in CBD<br />
CAD 1,500,000.00 CAD2,000,000.00 $1,485,148.51 $1,980,198.02<br />
Land in Office Parks<br />
Land in Industrial Parks<br />
Office/Industrial Land - Non-park<br />
CAD<br />
CAD<br />
CAD<br />
600,000.00 CAD 1,000,000.00 $ 594,059.41 $ 990,099.01<br />
500,000.00 CAD 750,000.00 $ 495,049.50 $ 742,574.26<br />
600,000.00 CAD 900,000.00 $ 594,059.41 $ 891,089.11<br />
Retail/Commercial Land CAD 1,000,000.00 CAD 1,500,000.00 $ 990,099.01 $1,485,148.51<br />
Residential<br />
CAD 400,000.00 CAD 1,000,000.00 $ 396,039.60 $ 990,099.01<br />
<strong>2012</strong> <strong>Global</strong> <strong>Market</strong> Report n www.naiglobal.com 45