Similar to the residential land shortage, the industrial land inventory is getting rapidly developed. The Metro Vancouver 2020 Regional Industrial Lands Inventory states 82% of 2016’s available industrial land has been built on. But in contrast to residential, some industrial land in prime locations in the GVRD is getting rezoned to make way for condos, further tightening the supply.
Metro Vancouver industrial space vacancy is hovering in the 1% range and limited available space will continue to be the norm as demand will continue to grow due to ongoing population and container volume growth. Our multiple container facilities are a central hub for the evolving economy with almost a quarter of industrial space being used by third-party logistics (9%) and e-commerce companies (11%), which continue to experience unprecedented expansion with the need for space near ports and population hubs for speedy order fulfilments.
These demographics create a large solid demand for industrial space in central hub locations. Demand is high for quality properties and especially for large holdings, evidenced by the Artis REIT selling its GTA industrial holdings for a 36.2% premium on June 21, 2021. Not only are existing structures selling at a premium, but new purpose built facilities are getting approved and built to fill the ever increasing needs of e-commerce giants such as Amazon with community support.
Investors are looking for good cap rates in solid stable investments and certain Canadian real estate sectors such as industrial warehousing and manufacturing space are one of the places to be.