Greater Victoria’s swelling tech industry is fueling a demand on suburban office space that could soon outpace supply.
Nearly half (43 per cent) of the office space under construction in just four of Greater Victoria’s suburban markets (Langford, Colwood, View Royal and Sooke) have already been pre-leased, according to real estate market analysts CBRE Group’s first-ever Victoria office report.
As average office rent fell 2.1 per cent and drove demand throughout the 2021 fiscal year, office vacancy rates throughout Greater Victoria fell to 6.8 per cent.
“Historically, we’ve had strong activity from both the public and private sectors here in the city,” Ross Marshall, senior vice-president of CBRE’s Victoria office told Black Press in an email. But it’s the tech sector that’s made this year’s impression in suburban office markets as employees return to in-person work, businesses are capitalizing on large gains and families are moving to those suburban Island markets, he said.
“We’ve witnessed renewed optimism and are seeing pent-up demand re-enter into the Victoria and Greater Victoria markets,” Marshall said.
Competitive land pricing and development-friendly policies are to thank for private company’s ease of access to the office rental market in these suburban communities, according to CBRE’s report. Plexxis Software offers a prime example in the report. The Ontario-based software company is building a 54,000-square-foot, six-storey building in Langford, of which it plans to occupy the top two floors while renting the rest once complete in 2023.
“When more opportunities opened up at lower price points, local businesses upgraded their business operations in a ‘flight to quality’ scenario,” Marshall said.
Office vacancy rates across downtown Victoria are also expected to decline as workers return from remote work and the government sector renews their leases, according to the report. Two buildings promised from Telus Ocean and Jawl Properties developers will provide 302,000 square feet and 20 storeys of additional downtown office space once complete by 2024.
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