DOWNTOWN OFFICE VACANCY RATES CONTINUE TO RISE
For the third consecutive quarter, the office vacancy rate in the Downtown Van BIA catchment continues to increase. According to CoStar property data, vacancies reached 8.7% at the end of Q3. This is a 4.8% increase since Q2 and a year-over-year increase of 28%.
The Class-A office vacancy rate has fallen since Q1 2023, despite the rise in overall vacancy. Between Q1 and Q3 the Class-A office vacancy rate dropped by 2.7%. In the same period, Class B and C office vacancy rates rose by 20%.
DOWNTOWN RETAIL CORRIDOR VISITS INCREASING
Downtown retail corridor recovery to 2019 visitor volumes slowed during the summer of 2023. However, between August and October, downtown visits saw two consecutive months of renewed recovery toward pre-pandemic volumes. Downtown Van measurements have shown that W. Hastings Street, Robson Street, and Granville Street have all experienced similar recovery trajectories over the past three years. Alberni Street has consistently performed better than the other retail corridors and is the only one seeing visitor volumes above 2019.
RESTAURANTS AND TRAVEL AND ENTERTAINMENT BOUNCE BACK. RETAIL SPENDING DROPS.
After year-over-year spending dropped between July and August, downtown restaurant and travel and entertainment spending rebounded in September. Restaurant spending has consistently performed worse than the other two categories in 2023.
As the cost of living and the cost of goods increased, Canadians are choosing to dine out less before cutting back on anything else. As a result, year-over-year downtown restaurant spending saw three consecutive months of negative growth between April and June. In September, restaurant spending saw marginal growth at 1%.
When compared to restaurants and travel and entertainment, retail spending did not see as extreme of a drop in sales growth through the pandemic. However, the downtown retail category saw negative sales growth in September for the first time since the beginning of the pandemic. This points to the broader trend of Canadian consumers choosing to spend less. Similarly, the average retail transaction size has not seen positive year-over-year growth since May 2022. Even during times when retail spending is seeing year-over-year growth, consumers are choosing to spend less with each transaction.