It looks like a steady year for commercial leasing in B.C.

There is a strong demand for industrial space in Vancouver, said Jennifer Savady, research manager for Royal LePage Commercial.

The industrial inventory is 157 million sq. ft. in the Greater Vancouver Regional District (GVRD), with just under 22 million sq. ft. of that in Vancouver proper. Total vacancy is at two per cent for both sale and leased space.

The GVRD usually has two million to 2.4 million sq. ft.of industrial construction per year. Last year was on track with 2.2 million sq. ft., and no change is expected in that pace this year.

The office market in the GVRD totals 44.5 million sq. ft., with 23.8 million sq. ft. in downtown Vancouver. The overall vacancy is 14.5 per cent, she said.

But downtown offices are only 12 per cent vacant, with the highest vacancy in that submarket in C Class buildings at 16.5 per cent. The prestigious AAA Class buildings have nine per cent vacancy.

Savady said office vacancy should increase slightly in 2004, then decline again.

That’s because 1.3 million sq. ft. of offices were in the GVRD last year, mostly the 880,000-sq.-ft. Central City office tower in Surrey.

If you add that much space, you automatically raise the vacancy rate for a time, so Surrey’s office vacancy rate stands at 41 per cent.

U.S.-based banking company J.P. Morgan Chase is to take up 132,000 sq. ft. of Central City this year, Savady noted.

Other suburbs are reporting pretty stable figures. The Broadway Corridor has 13-per-cent vacancy, Burnaby has 12.5 per cent, Richmond 17.2 per cent, the North Shore 17.8 per cent and New Westminster 11 per cent. Only two major office completions are expected this year, the Shaw Tower downtown and the B.C. Cancer Research Centre in the Broadway Corridor.

Office rental rates in Vancouver have been low for a couple of years.

After the tech wreck of 2000, vacancies went up and rents down.

“Landlords had to defend themselves,” Savady said.

Now tenants are trying to secure low rates for the future by locking in a lease. Landlords then have to decide whether to sign a deal at a low rate or wait and see if there’s more money on the table later.