Vancouver’s lack of industrial facilities could hurt BC’s economy

Vancouver has a 0.6% vacancy rate in its industrial sector, which is 1.2 million square meters out of a total of 204 million, and with a shortage of facilities greater than 100,000 square meters available, the provincial economy risks being hit.

“How can a business maintain being in one place if they can not find growth opportunities so they will look at other markets over time. It’s not that it’s already a trend, but some will go to Calgary over time, and some will try to service the market out of other facilities they have, ”said Ilya Tihanenoks, broker and Associate Vice President of CBRE Vancouver. growth opportunities, BC’s economy will be hurt by companies leaving. “

According to Colliers’ Q3-2021 Vancouver Industrial Market Report, the city entered a fifth consecutive quarter with zero vacancies in the 100,000+ sq. Category. ft. and a consecutive quarter without availability of facilities greater than 50,000 sq. ft. As a result, the demand for strata space, or industrial condominiums, has never been stronger.

“The first three quarters of 2021 saw a record high average price per square meter for layers in [Greater Vancouver Area] to $ 429 per. square foot, an increase of 110% from the same period in 2016, “the report states.” Vancouver city also set a record high average price per square foot for strata in the first three quarters of 2021 to $ 619 per square foot, an increase of 98% from the same period in 2016. “

READ: Frustrated investors turn their attention to Vancouver’s white-hot industrial sector

Aside from a lack of inventory, e-commerce companies are already struggling with supply chain disorder, and according to Josh Gaglardi, Rector of Orion Construction, a light industrial and commercial developer, the demand for warehousing and distribution space will be stronger through 2022. perfect storm signals more headwinds may be around the corner.

In addition, e-commerce companies have adopted “last mile”, or same day, delivery in bulk, which will make it harder for businesses to leave the Vancouver core. But they may have no choice, Gaglardi says.

“I feel it’s time for developers and builders of industrial premises to consider more deeply communities outside the lower mainland for industrial development and construction opportunities,” he said. Communities like Kamloops, Kelowna, Victoria and Langford deserve more of our attention. Other areas of the lower mainland outside of Metro Vancouver are also ripe for more industrial development, including Mission, Abbotsford and Chilliwack. These cities are growing rapidly and enjoying increasing degree more diversified economies.In addition, the pandemic has led many people to consider leaving the big city to other communities around the province, so we see plenty of opportunities out there.We can never fully predict exactly where our economy and industrial demand is heading , but diversifying and diversifying BC’s industrial stockpile would be a step in the right direction. “

Written by
Neil Sharma

Neil has been covering real estate for a number of years as a Toronto-based journalist. Prior to joining STOREYS, he was a regular contributor to the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth and several other publications. Do you have a real estate history? Email him at [email protected]

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