The COVID-19 pandemic has caused unimaginable damage to businesses, large and small. The drastic reduction in activity in March, April, and May has hurt many tenants. The initial Government of Canada Emergency Commercial Rent Assistance (CECRA) needed to be initiated by the landlord. Many tenants and landlords struggled with the documentation and red-tape needed to apply for rental subsidies. Subsidies often weren’t obtained until September. 

The CERS is a new rent subsidy program replacing the Canada Emergency Commercial Rent Assistance (CECRA) effective Sept 27th, providing rent subsidies directly to businesses, rather than landlords. It will support businesses, charities, and non-profits that have suffered a revenue drop, by subsidizing a percentage of their expenses, on a sliding scale, up to a maximum of 65% of eligible expenses until December 19, 2020. Organizations would be able to make claims retroactively for the period that began September 27 and ends October 24, 2020. A top-up subsidy of 25% for organizations temporarily shut down by a mandatory public health order issued by a qualifying public health authority will also be available in addition to the 65% subsidy.

In Victoria, the retail and foodservice industry has suffered reprehensible and long-term damage. Restaurants are having a tough go at keeping open. Oftentimes a business will run at a loss if it opens for business at reduced capacities. Each month, more and more vacancies are appearing. While brick & mortar retail has been on a downward trend for the past decade, the acute and sustained nature of COVID-19 serves as a major blow. Going into Spring 2021 we will see a very different retail landscape. Perhaps an opportunity for some businesses to secure prime retail spaces at reduced prices. 

Investment activity remains low in Victoria. The most recent landmark sale remains Tillicum Center by Anthem Properties of Vancouver for $110M in 2019. In addition, the sale of First Capital Realty’s portfolio included Langford Centre. 

In the downtown core, new office and multi-family developments continue to provide upgraded retail options as well as an ongoing expansion of the traditional retail core. For example, 1515 Douglas and 989 Johnson providing prime retail opportunities. In terms of new development, Langford leads the way with the completion of Crombie REIT’s Belmont market which added 160,000 SF of regional retail space for Thrifty foods, Anytime Fitness, and Scotia Bank.

Industrial remains resilient despite the COVID-19 pandemic. Warehousing, construction, and technology continue to operate in the COVID-19 world. This asset class has felt the least impact. Long term leases, ultra-low vacancy, and ultra-low inventory. 

Industrial sales volume was up 23% year over year to over $75M in 2019. The vacancy rate is at near 0% as existing industrial zoned land and business parks are at capacity. Tenants who are experiencing growth cannot expand or find relocations.

Once again, the Westshore is the Capital Regions growth centre with approx 225,000 SF of new industrial product for sale and lease at the Allandale business park which is located in Colwood. The 20 acre project is being undertaken by Omicron and Lotus Capital Corp.

Going into 2021 we will see continued demand and upward pressure on the $15 avg base lease rate. Sale transactions will be hard to come by as landlords enjoy their stable income producing properties.

Office has experience some headwinds globally for the past decade. The COVID-19 pandemic further pushed organizations and employees to work remotely, from co-working spaces, or from home. The vacancy rate of 6% is in-line with long term averages. The stability of Victoria’s office market can be largely attributed to the public sector. 

Telus announced that it will construct 117,000 sqft of office space for itself at the Apex site in Downtown Victoria, 767 Douglas Street. The City of Victoria opted to proceed with a development planning process and a land sale that ultimately saw partners Aryze Developments and TELUS co-operate on the TELUS Ocean concept. 

Merchant House Capital is underway with the Victoria Press Building (old Times Colonist building). This will see approx 75,000 sqft of new office space.

The Victoria office Market has historically been dominated by the province and JAWL properties in Victoria. 2021, like 2020, will likely see no new office developments in the downtown core. The completion of Capital Park by JAWL/Concert has added 107,000SF of new supply for the province. The technology sector is also a main driver of office leasing, accounting for 25% of activity in 2019. The suburban markets of Saanich, Langford, Colwood are seeing some modest construction with approx. 140 thousand SF of space to be delivered in 2021/22. 

Notable sales for 2019 were the 180K SF Gateway Technology Park acquired by Headwater. Downtown transactions included the 56K SF international house for $23.6M and 39K SF 780 Blanshard St was purchase for $14.6M by Reliance Properties of Vancouver.