Vancouver commercial real estate strong in all sectors: Avison Young

Avison Young, which released the figures this week, said the record sales dollar volume and total deals were the result of low borrowing costs and a redeployment of capital led by REITs, pension funds and public and private institutional buyers.

But an even bigger factor – a shortage of land – is likely to keep the commercial market strong for years to come, said the report.

“Barring any macroeconomic developments that could disrupt global financial activity, the fundamentals of the metro Vancouver industrial real estate marketplace remain solid,” said Avison Young. “In a land-constrained market with a self-regulated development community, oversupply is unlikely to become a factor.”

One of the more dramatic increases in 2010 was seen in the second half of the year for office product. In that time, dollar volume increased more than 50%. In retail, the largest investment sector last year in British Columbia, there was $1.2 billion spent on 40 retail locations.

On a smaller scale, multi-family investment buildings saw $264.1 million in sales in Metro Vancouver, as rental vacancy slipped to 1.9% in October 2010 from 2.1% a year earlier.

“Strong migration flows and fewer first-time buyers moving out of rental accommodations into homeownership pushed the vacancy rate lower,” said the report.

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