4 of Metro Vancouver’s Hottest Industrial Markets
Growing confidence and expanding businesses drove Metro Vancouver industrial leasing last quarter, with deals for 1M SF of large-bay warehouse space. Here, via figures from Colliers, are four of the region’s hottest markets.
1. Surrey
Activity: 786k SF under construction, and 226k SF of new supply delivered year-to-date. Distribution tenants are the overwhelming driver of lease activity in Surrey, including Fluxwerx Illumination taking 89k SF at 9255 194 St in Port Kells (seen above).
Vacancy: Dropped to 2.3% in Q2 versus 3.1% the year before.
What’s available: Furious leasing activity in Q2 has made it increasingly difficult for tenants seeking bigger facilities to find space, especially at Campbell Heights Business Park. Availability rate is 4.3%.
2. Richmond
Activity: 84k SF under construction, and loads of leasing in Q2, including the relocation and expansion of Orbit Distribution Systems from South Burnaby to a 147k SF space in the Sun Life Financial-owned distribution centre at 13240 Worster Court (formerly a Honda parts facility).
Vacancy: Down to 3.5%, versus 4.3% in Q2 last year, and vacancies are being filled at an unprecedented rate.
What’s available: With no supplies delivered last quarter, and little development on the horizon, lack of inventory has become a challenge.
3. Vancouver
Activity: 184k SF under construction, including Wall Financial’s Strathcona Village, a 57,600 SF spec project slated for Q4 delivery. South Vancouver's small-bay leasing market thrived in Q2, with Laser Cutter Café taking 26k SF at 780 East Cordova St.
Vacancy: Up to 3.5% from 2.1% this time last year.
What’s available: With a 4.9% availability rate and 65k SF delivered in Q2, Colliers says a “keenly felt lack of supply” will propel lease rates to new highs as aggressive users and investors battle for remaining space.
4. Delta
Activity: 768k SF under construction, and 151k SF in net absorption in Q2, with Direct Limited Partnership leasing 102k SF at Grosvenor’s Millennium VI (above), evidence of growing demand for new high-efficiency facilities.
Vacancy: Dropped to 5.2% from 8.6% in Q2 2014; 1.4M SF is sitting vacant.
What’s available: Availability rate is 9%, and with the next wave of spec development not expected until the end of 2016, Colliers says the market for distribution centre space will “drastically tighten.”
