Advancing the conversation on land and real estate issues in BC.
Amazon warehouse. Credit: flickr/Jaimie Wilson
“The industrial property market in BC continues to be one of the best performing asset classes over this past year, even with the global pandemic challenges,” writes Tim Down, RI, of RE/MAX Anchor Realty.
Industrial property continues to see low vacancies and high demand across most of the province. Unlike other real estate sectors, which saw a decline in new leases, the industrial market in 2021 experienced an increase in leasing activity.
“Industrial transaction prices per square foot are on the rise, vacancy rates remain at historic lows, and new leases are being signed at ever higher rental rates,” says Down.
Industrial leasing activity has more than doubled in 2021 from 2020. This intense demand has meant that “investors, tenants, and owner-occupiers are being forced to look beyond Metro Vancouver in search of space, including secondary markets in the eastern Fraser Valley, Victoria, and Kelowna. Basically, the industrial market remains as hot as it has ever been, with limited supply in all markets,” says Down.
E-commerce has been a critical part of the industrial picture for the past few years. This activity has been further surging during the pandemic, with consumers demanding increasingly faster delivery speeds.
“This emerging trend will require an estimated three-times increase in the amount of warehouse space, as compared to traditional physical retail locations, due to the pick-and-pack process required for order fulfillment,” explains Down. “There continues to be strong demand for warehouse and distribution, last-mile distribution, and cold-storage facilities in locations adjacent to densely populated areas. Bulk distribution warehouses are in high demand as consumer expectations for same-day delivery service is creating the need for smaller-scale urban distribution facilities.”
|Download Fall 2021|
Read more about the industrial property market in Down’s “Pandemic Accelerates Industrial Market” in the Fall 2021 issue of Input. Download Fall 2021
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