Van Sun Industrial land More industrial land needed to keep businesses — and higher-paying jobs — in Metro Vancouver: Report
Industrial jobs pay 14 per cent higher on average but high costs and few options are pushing new and existing businesses to seek locations outside of B.C.
Author of the article:Joanne Lee-Young
Published Dec 23, 2024 • 3 minute read
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Biotech company AbCellera has a 130,000-sq.-ft. manufacturing facility under construction on Evans Avenue near Pacific Central rail station in Vancouver. Photo by Arlen Redekop /PNG
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After several years of a white-hot industrial real estate market in Metro Vancouver, with vacancy rates dropping below zero and record-high rental rates, there has been a softening in the last few months.
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However, the supply of industrial land, which boasts intense economic value, is still insufficient to accommodate all the needs for warehousing, distribution, manufacturing, processing, local production, and new emerging technology-driven businesses.
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“The big focus is re-emphasizing the importance of this land and the risks of losing it,” said Jonathan Cote, deputy general manager of regional planning and housing development at Metro Vancouver.
On Monday, the region released a new study on the economic value of industrial lands, updating information from the last report, which was conducted in 2019.
Cote said it is important to understand that high costs and scarcity of options are pushing new businesses wanting to be located in western Canada, or existing businesses that want to expand, to seek places outside the region and province.
In particular, they are heading to Calgary, which offers lower overall costs, abundant land and strong transportation options.
“It seems to be a destination, and it’s important to be aware of this dynamic,” said Cote.
In the last quarter of 2024, the industrial land vacancy rate in Metro Vancouver increased to above three per cent for the first time since 2015, according to global commercial real estate advisor Avison Young. That rate is still considered very low.
Demand moderated slightly as interest rates increased, there was more economic uncertainty and expensive building costs, and more people worked from home after the pandemic. Rental rates dropped 5.2 per cent year-on-year. The overall slowdown allowed the market to absorb available space.