With a growth rate of 30 percent over the last two years, Vancouver has swiped Seattle’s spot as one of the top markets for high-tech job growth in North America, according to a new report from real estate services and investment firm CBRE.
CBRE’s report highlighted that Vancouver is emerging as a magnet for Bay Area giants looking to expand outside the US.
CBRE’s Tech-30 measures the tech industry’s impact on different office markets in the US and Canada. The report measures 30 tech markets based on high-tech industry job growth, to determine how the industry influences the office markets in each city. In 2017 and 2018, Vancouver added a total of 13,600 new high-tech jobs, representing about 55 percent of new office jobs in the city, with Vancouver’s asking rent increasing by nine percent.
“We have a strong provincial tech sector that’s growing year-over-year and Vancouver is at the heart of that,” Raghwa Gopal, CEO of Innovate BC, told BetaKit. “Simply put, our tech companies are among the best in the world.”
The report found that tech “submarkets” outperformed overall office markets within cities that are most popular amongst tech talent. Submarkets are areas within larger markets that usually have limited office availability and are near leading universities. One of the top-performing submarkets included Vancouver’s Broadway Corridor, which has a vacancy rate of just 2.6 percent.
“Leading tech submarkets often outperform their overall office markets because tenants are willing to pay a premium in areas preferred by tech talent,” the report said. “Low vacancy in top tech submarkets often forces expanding companies into adjacent submarkets, creating larger tech clusters.”
“Along the Broadway Corridor, neighbourhoods such as Mount Pleasant and False Creek Flats have evolved from industrial service submarkets to hubs for tech, animation, and creative industry firms,” the report also noted.
In recent years, Vancouver’s tech ecosystem has seen ebb and flow. This year’s Startup Genome report saw the city drop by nine points in its overall rankings, which was attributed to a few factors, one of which included a “static” state of funding.
In CBRE’s 2019 Scoring Tech Talent Report, released earlier this year, Vancouver was listed as seeing the greatest increase in total tech occupations of any Canadian city, with a 42.6 percent growth rate from 2013 to 2018. Vancouver was also one of two Canadian cities included in this year’s WE Cities ranking of the top 50 global cities for female entrepreneurs, with Vancouver making number 11 on the list.
CBRE’s most recent report echoed remarks that Vancouver is emerging as a magnet for Bay Area giants looking to expand outside the US. Findings from CBRE’s report suggested that the preleasing of new construction in Vancouver’s downtown core has been “dominated” by several US tech giants.
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Grammarly, is one such company, announcing in September that it would be opening a Vancouver office. Microsoft, Google, Apple, and Amazon all opened offices in Vancouver, in the span of about a year, bringing thousands of new high-tech jobs along with them. The city has also nurtured three of Canada’s tech unicorns: Slack, Hootsuite, and Avigilon, and its green-focused economy has attracted a variety of cleantech ventures. But what’s more obvious, is that Vancouver’s coastal proximity to Silicon Valley has made it a draw for some of those larger American tech companies.
“Recent funding raises from companies like Clio, Trulioo, and Terramera contributed to one of the most successful quarters in BC tech history,” said Gopal. “We have companies like Acuva, Aspect Biosystems, and Saltworks Technologies that are solving real global challenges. Then, you add in the fact that Vancouver pays some of the highest rates in the country for high demand tech jobs, and it becomes quite clear why we’re sitting at the top of this list.”
Dell’s vice president and general manager of North America small business Erik Day, has previously attributed Vancouver’s recent success to the city becoming more of a tech hub, with improved access to talent.
CBRE also looked at Toronto, which came in as the third market for high-tech job growth, behind San Francisco and Vancouver. Toronto had a growth rate of 17.7 percent, with 30,200 new high-tech jobs added in 2017 and 2018, which represents 72 percent of new office jobs.
“Toronto has a vibrant tech ecosystem thanks to several incubators and world-class educational facilities that foster growth and create talent,” the report said. “Boasting the most active venture capital market in Canada, Toronto-based tech companies raised $1.5 billion CAD in seed, early-stage, and later-stage funding in 2018.”
Read the full report here.
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