The city’s supply of industrial property is now almost as scarce as vacant homes
You could see this coming. During the last quarter of 2018, the City of Vancouver’s industrial vacancy rate dropped again, from 1.7 to 1.4 percent, according to a new report from Los Angeles–based real estate services firm CBRE Group.
The study, Vancouver Industrial Market Statistics, Trends and Projections, points out that industrial has never been closer to the city’s residential vacancy rate, currently about 1 percent.
Besides rock-bottom industrial vacancy rates, CBRE found that rental prices surged 16 percent in 2018, to $11.86 per square foot. That’s the highest average on record, according to the firm.
“The rise has been unprecedented, but [prices] can be absorbed by multinational tenants,” Chris MacCauley, senior vice-president for CBRE Vancouver, said in a release. “The big concern is for the regional and local occupiers.”
It’s a trend that B.C. business owners—and particularly those in Vancouver—have faced for years.
But when it comes to the vacancy squeeze, CBRE thinks the buck might stop here after years of drum-tight supply. With some 5 million square feet under construction in Vancouver, the firm predicts that the city’s industrial vacancy rate will hit 1.6 percent for 2019.
“We need to continue to try to meet the supply demands to strengthen our local economy,” MacCauley said. “But we need a multi-pronged approach to solutions, including intensifying industrial lands as well as looking at land use policies and the ability to expand existing industrial parks.”