Razor-thin industrial vacancy in the region pushes up land values, lease rates and makes business a tougher prospect.
For Metro Vancouver, winning the race to the lowest industrial-land vacancy rate in North America isn’t an enviable accolade, instead it’s pushing the region closer to crisis mode.
Inside Vancouver itself, the soaring industrial property values that come with shrinking vacancies are creating an affordability crisis for businesses, said Pietra Basilij, manager of industrial initiatives for the Vancouver Economic Commission . Commercial realtor CBRE Group Inc. reported last August that Vancouver lease rates were up 29 per cent, year-over-year, compared with a three-per-cent increase globally.
And in Vancouver itself, some 10 per cent of industrial businesses reported that they needed to move within two years and another 40 per cent suspected they might have to, Basilij said, mainly because of the cost.Explosive growth of ecommerce, with its need for warehouse space to ease last-mile distribution near the city is a big reason why demand is racing ahead of developers’ ability to supply space, said Bougie, along with the solid growth in technology and food manufacturing.
The continuing squeeze is forcing industrial developers to become more innovative by pushing buildings higher, since they can’t sprawl, and increasing density any way they can. Bougie said that has included building ceiling heights up to 40 feet to accommodate warehouse racking and lift systems to reach higher levels, and strata-titled developments where businesses buy their space instead of leasing.
“The City of Burnaby seems to be flexible in allowing , and a developer is ready to go,” Bougie said, “and I suspect you’ll see some multi-storey development adjacent to Vancouver where land values are sufficiently high.”
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