NAIOP Vancouver releases Industrial Land Review Report as Part of Forum Breakfast Session

On June 20, over 220 people attended NAIOP's Industrial Land Forum which was combined with the release of NAIOP's report on the Availability of Market-Ready, Vacant Industrial Land. Graeme Silvera, President of the NAIOP Vancouver Chapter, explained to the audience that NAIOP commissioned the report to fill information gaps that existed in the current data that was available.

"Our canaries in the coalmine (the industrial brokerage community) were telling us that it was becoming increasingly difficult if not impossible to locate options for certain tenants that were seeking to locate or expand to serve their customer base in the region"

"We verified our market intelligence by surveying owners and developers who confirmed through evidence that tenants were indeed giving up on finding viable options and were making the decision to either relocate out of the Metro area (to Calgary) or to simply shelve decisions to expand"

"When we took a look at what data was available, Metro Vancouver had clearly done an excellent job with their Industrial Land Inventory, but they noted themselves that there were shortcomings in their analysis. "

"Given the importance of a healthy industrial land base to the region, NAIOP decided to invest in a detailed study using the Metro Report as a starting point to drill down into how much of that 4500 acres identified in the Metro report was truly available to the market in the short term (before 2017)"

"NAIOP didnt commission the report to be alarmist or to say that we will run out of land in 5, 10 or even 15 years, the true reason that we commissioned the report was to provide all of the stakeholders involved with an accurate base of information upon which to have a regional level discussion on how to ensure that we can remain competitive both on a global scale and maintain opportunities to grow and retain the job base that we need in the region to support our population growth which is going to occur."

NAIOP assembled a panel with key industry, private sector, municipal and regional representatives who included Chris MacCauley, Vice President Industrial Properties, CBRE Limited; Tom Corsie, PPM, Vice President, Real Estate, Port Metro Vancouver; Delia Laglagaron, Deputy Commissioner, Deputy Chief Administrative Officer and General Manager, Planning, Policy and Environment, Metro Vancouver; Marcy Sangret, Deputy Director of Community Planning & Development, Corporation of Delta; Oleg Verbenkov, B.A., C.S.P., M.C.I.P., R.P.P, Principal and Senior Project Planner, Pacific Land Group and Dave Gormley, AScT, MBAVice President, Land Development, Beedie Development Group. 

The panel was moderated by Mark Renzoni, Chief Operating Officer and Executive Managing Director, CBRE Limited.

Following presentations by Metro Vancouver on the Regional Growth Strategy and their current work on the Industrial Land database, Port metro Vancouver presented on the importance of the Port to the regional economy which revealed surprisingly that the Port may require up to 1,800 acres just to meet Port related needs to serve their expanded terminals in the next 10 years followed by a presentation from Pacific Land Group on the key findings and the research methodology of the report.

The methodology

Pacific Land Group (PLG) was retained by NAIOP to undertake a comprehensive acre by acre study of the 4500 acres that Metro Vancouver identified as Vacant, Market ready lands that could be developed prior to 2017.  PLG undertook a review of each land parcel and identified whether there were any constraints that would limit the availability of the parcel for immediate development.  These constraints included:

  • Government/quasi-government owned
  • Current use
  • Environmentally sensitive area
  • Non-industrial designation or present non-industrial zoning
  • Servicing and other restrictions
  • Isolated lots under 1.0 acre
  • Ownership structure
  • Unique restrictions (environmental, legal, topography).

Key Conclusions

  • Of the constraints identified, Government or Quasi-Government ownership was the most prevalent restriction which encumbered 900 acres of land
  • Only 2,500 acres of the 4,500 acres of industrially zoned land identified in the Metro report were available for near term development throughout Metro Vancouver
  • Based on the historical average of 250 acres of land per year absorbed in the region, 2,500 acres could represent approximately between a 10 to a 12 year supply
  • Based on anecdotal evidence supplied by the market of a higher absorption rate of up to 400 acres per year, this could represent about a 6 to 9 year supply. 
  • Including Activity associated with the Ports, over 200,000 direct and indirect jobs in Metro Vancouver are directly related to the industrial sector
  • The availability of land for Distribution, Regional contractors, food service and agricultural cold storage facilities, national and international logistics, e-commerce, and large scale manufacturing corporations is particularly limited in the short to medium term

The Panel discussion between the participants was lively at times and full of interesting data and facts that fully support the need for all of the regions stakeholders to sit down at the table and discuss this very important issue.  

Questions ranged from whether it is practical to Intensify and Densify uses on Industrial land (Dave Gormley from Beedie said yes to smaller users in more urban areas on small lots and no to larger users who need heavy floor loadings and access), Issues around municipalities banning outdoor storage of containers (which will be a very big issue for the upcoming Port Expansion as these containers will have to be stored somewhere), the fact that while we may have land available, that it is in the wrong location (see Metro's report for the largest chunk of future land which is located in Northern Maple Ridge in a hilly area), the idea of an Industrial Land Reserve and of course the elephant in the room, the ALR, which clearly was the most divisive topic the panel had to face. 

After a solid two hours of presentations and great discussion, I sensed that amongst the panelists, while there obviously wasnt agreement on all topics, that there was general consensus amongst all of the parties that the issue is real, it cannot be ignored, we are and will continue to lose jobs and prosperity for our region to other areas if we dont get together and find a solution for the larger industrial users in our region, which wont be easy and we need to start now.  

In my opinion, the goal that we had at NAIOP to spark a discussion and a dialogue on this issue was not only met, it was exceeded in spades and we now need to continue to push to get a regular dialogue started between all of the stakeholders, including the one key Stakeholder who has been absent in the regional discussion to date, the Province of BC as it was clear from the discussion that the ALC needs to be at the discussion table and not just an observant third party if we are going to find a resolution as a region. 

As part of the report, NAIOP also wanted to very clearly state that we are not in favour of the establishment of an Industrial Land Reserve (ILR) as we believe that this will severely limit the ability of the region to respond effectively to market forces and infrastructure changes shift uses and transportation patterns over time.  The consensus at the panel on this issue was clear that all parties didn't feel that a Reserve was needed or warranted. 

NAIOP's interest is aligned with the region's interest in ensuring that the region retains the ability to support the expected future growth in employment both in the short to medium term and in the coming decades and we look forward to the next phase of dialogue.

About NAIOP

NAIOP Vancouver has a strong industry membership with developers, owners and related professionals in office, industrial, retail and mixed-use real estate. It provides strong advocacy, education, business opportunities and industry networking through a powerful network.

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