Vacancy rates for commercial property – additional information
The economy affects the demand for commercial property. Therefore, when the economy is strong, vacancies are typically lower. Rental vacancy has been decreasing in the commercial property sector since 2012, indicating the presence of a strong economy, but in 2016 it is expected to increase ever so slightly. However, this increase is primarily due to increasing vacancy within apartment properties while rates for retail, industry and industrial properties are expected to stay pretty much the same in 2016 as they were in 2015.
Increasing apartment vacancy is likely to provide some rent relief, specifically for multi-family properties and for others, as apartment rental prices have been increasing slightly more than normal over the last four years.
The property types experiencing the highest vacancy rates are office and industrial properties and the net absorption rate of commercial property is highest for these property types. Net absorption is equal to the amount of properties which are occupied at the end of a period, minus the amount occupied at the beginning of the period, taking into consideration space vacated. So even though these sectors have the highest vacancy, they are also being filled up the fastest.