Interest Rates Low for Q3 in Vancouver, BC
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Industrial Demand Drives Land Prices Up in Metro Vancouver
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(Posted on Nov 7, 2018 at 08:39PM by Michelle Bogle)
The Metro Vancouver industrial market continues to experience vacancy rates well below the fiveâ€year average of 2.6 percent. According to a recent Real Estate News Exchange article, there are approximately only 20 months of industrial supply based on present vacancies and premises under construction.Â
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Currently, there is 3.1 million square feet of space in Metro Vancouver being built on spec, along with an additional 11.49 million square feet either under construction or planned without lease commitments. Three notable projects include the Tsawwassen First Nation lands near Deltaport, Onni’s Golden Ears Business Park and Oxford’s Riverbend Business Park.
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Q3 2018 also saw the completion of Delta iPort’s Building 1, which Amazon has leased 454,000 square feet to be used as a fulfillment centre. Campbell Heights West Business Park’s Building 200 also added 202,105 square feet to the industrial market, along with Delta Link Business Centre Phase II with 133,765 square feet.
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With supply of industrial land dwindling, especially larger parcels that are ideal for major distribution centres, space of this scale is becoming scarce and driving land prices up across the region. Over the last six months, industrial property sales across Metro Vancouver hit $747 million, but this is expected to increase by an additional $347 million as in-progress deals continue to close. The sale of industrial land is currently sitting at an average price of more than $5 million an acre. Â
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And, investors are taking note. In fact, many residential investors are moving into the industrial sector, being lured by increased demand, sustaining market prices and handsome returns. Competition is fierce, which means that the time to act is now.
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To learn more about Vancouver’s burgeoning industrial market, please contact our team of asset-focused commercial real estate advisors at Marcus & Millichap’s Vancouver office. Â
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