Globe commentary Vancouver Industrial Vancouver’s supply side is even more constrained, given its location between mountains and sea.
According to CBRE’s Q3 report, there was an industrial vacancy rate of 2.4 per cent in the Metro Vancouver area.
Chris MacCauley, executive vice-president at CBRE’s Vancouver office, cites a vacancy drop of 20 basis points from Q3 to Q4.
“We have a limited land supply and a regulatory boundary around our lands,” he says. “That’s why it makes it more attractive for investors. It’s also why it makes us more expensive than any other market.”
Lease rates are over $20 a square foot, according to market reports, but Mr. MacCauley says the 20- to 30-per-cent increases a year seen during the pandemic are over.
“We used to be three or four times [higher than] Toronto or Calgary. Now we’re on par with parts of the Toronto market and double the Calgary market.”
Mr. MacCauley says private owners dominate the Vancouver market.
“Institutions want to be here. They will tell you they are underweight in Vancouver industrial and they’re willing to pay a bit because they understand the barriers to Vancouver are very hard,” Mr. MacCauley says.
In secondary markets, such as the Fraser Valley and tertiary markets like Vancouver Island or the interior, mid- and small-bay assets offer a chance for mid-level investors to gain access to the industrial market, he says.
International buyers from the U.S., Europe and Asia are starting to show interest in large-scale Vancouver assets, he adds.
“They want hundreds of thousands of square feet or a million-plus. These types of funds look at new builds or large portfolios,” he says.