Industrial Real Estate: Is Multi-Level Development the Future?

When it comes to industrial real estate, Vancouver’s lack of available land is hardly a new topic of conversation. So like any industry with limited resources, the question remains on what we’re going to do when the land runs out.

Industrial buildings have always been single level, as it’s believed to be the most functional and efficient. But as land mass has become scarce, developers in countries such as Japan and Singapore have turned to multi-storey warehouses to handle the demand.

Back in 2013, Site Economics Ltd. and Omicron released a High Density Multi-Level Industrial Feasibility study, which explored the idea of introducing these types of developments to Vancouver.                                                 

“An example of a multi-level industrial building is the Asia Airfreight Terminal (AAT) in Hong Kong. The warehouse occupies 166,000 m2 (1.8 million sq.ft.) across 4 levels with each level designed and equipped with advanced facilities for handling different types of cargo. To increase working efficiency, the terminal has truck docks in every level for quick loading of cargo. The building construction cost was more than $200 per sq.ft. due to its innovative architectural design which allows for advanced material handling systems and pioneering IT applications. AAT is one of the world’s leading air cargo terminals handling 1.5 million tons per annum.”



And it’s not just Europe and Asia that multi-levels are becoming commonplace. The Wall Street Journal recently announced that Prologis, the world’s biggest warehouse owner, will construct America’s first three-floor, 580,000-square-foot warehouse just outside downtown Seattle. It is scheduled to be completed in 2018.



We asked Canadian industry leaders whether they thought multi-level industrials could be a way of the future, or if our city just simply wasn’t equipped to handle this type of format.

“It’s certainly a possibility, but we’re in the early stages,” said Jeff Miller, Vice President of Industrial in Oxford Properties Group. “Multi-levels have no flexibility and are complicated buildings. I think we’re still a way away.”

Beth Berry, Director of Industrial Development at Beedie Group, shared that Vancouver still has some choices available in the market, and we’re not in the position yet to have to consider these types of alternatives.

For Lee Hester, Senior Vice President of Industrial Sales and Leasing at JLL, only a handful of industries could benefit from multi-level industrial development. These include engineering, film, technology, and specific types of manufacturing businesses.

“Multi-tenant warehousing can play a role, but it must be very specific to the end user. Traditional industrial requires forklifts, semi-trucks, and major transportation. Areas like Strathcona and North Vancouver could not accommodate industrial traffic with the amount of residential in the region. Flex industrial won’t help true industrial needs.” 

What do you think? Is Vancouver ready for multi-level industrial buildings? Tweet @naiopvancouver and let us know!

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