Residential isn’t the only market that Vancouver is garnering national attention for. Industrial real estate had an incredible year in 2016 and, according to our January Breakfast Panel, will only get better. This quick acceleration has been due to a number of reasons, which our panel discussed in detail over the hour-long event.
“Let’s just say it’s a good time to be a landlord in Vancouver,” said Jeff Miller, Vice President of Industrial in Oxford Properties Group. “The industrial real estate market has performed extremely well. It’s so unique because of how fragmented it is. It’s a subset of individual markets spread across bridges and rivers, and more importantly there’s a high percentage here of capable landlords and private owners.”
4,654 square foot warehouse currently for rent in Vancouver, via CBRE
CBRE’s Q4 market review of Metro Vancouver’s industrial real estate sector showed that sales reached a record $1.2 billion in 2016, up 9% from the previous year. The region also saw industrial leasing space vacancy rates drop to 2.4% - the lowest level since 2007.
“I’ve never seen vacancy as low as it is, and I don’t see it changing anytime soon,” said Lee Hester, Senior Vice President of Industrial Sales & Lasing at JLL. “Vacancy is declining in all areas of industrial, as spaces that are 2,000 to 25,000 square feet are in extremely high demand.”
“If you want to grow, you have to move east,” explained Beth Berry, Director of Industrial Development at Beedie Development Group. “Richmond is changing more into residential and commercial, ie industrial, which was once dominant in the region, is becoming less and less.”
One of only a handful of industrial properties currently for rent in Richmond, via CBRE
Former NAIOP Vancouver President Chris MacCauley, CBRE’s Senior Vice President of Industrial and Logistics, was recently quoted in The Province, sharing that “It’s definitely been the trend in the last three years that [industrial] demand has outpaced supply almost two-to-one. It’s something that has no easy fix; it will take some long-term planning throughout Metro Vancouver to find out what are the right places for industrial land of various uses.”
MacCauley also added that approximately 50% of the supply coming on this year in Metro Vancouver is already spoken for, less than one month into 2017. As a result, more companies have been forced to go to Surrey and Delta because of lack of availability.