It’s been quite the year for the industrial market in Vancouver, which is why last month’s Breakfast Event moderator, Beth Berry from Beedie Development Group, posed this question to our expert panel. With Q4 having the lowest vacancy rate since Q2 2013 and Vancouver breaking the $1 billion mark for the second time in three years, the demand for industrial space was an all-time high.
Sean Ungemach, Senior Vice President of Cushman and Wakefield, explained that these impressive numbers are not a fluke, but rather an indicator of consumer demands and outside factors that have contributed to a changing market. Having personally leased 2.5 million square feet of industrial space in a three-month period last Spring, he and our panel credit factors like low gasoline prices, rising housing valuations, and accommodative borrowing conditions to a successful year.
Darren Cannon, Executive Vice President at Colliers, also attributed the falling oil prices to making trucking costs more affordable to go to-and-from Vancouver. In addition, our city has more workers available for businesses to employ compared to five years ago. Plus, e-commerce has driven the need for warehouse space to accommodate the surge of online shopping.
Over the past year, demand for industrial land, strata units, and stand-alone buildings remained very strong. And despite a fewer amount of deals, sales set record highs as the average price per square foot increased significantly, achieving rates close to $200 psf for strata sales.
So what’s in store for 2016? We’ll take a deeper looks by sharing insights from our panel in our next blog post. Stay tuned!