Demand for industrial units is outpacing supply in Vancouver and the Fraser Valley with the vacancy rate trending lower.
CBRE says the vacancy rate for industrial units in Metro Vancouver was 2.3% at the end of 2017, down 160 basis points from 3.9% a year earlier.
It’s the lowest vacancy rate in the metro’s history and is the second lowest in North America. There was over 4.7 million sq. ft. of positive absorption in 2017, outpacing the 3.1 million sq. ft. of new supply.
That pushed net rents up more than 13% to $10.23 per sq. ft.
“It used to be that when companies couldn’t find space in Vancouver, they moved to the Valley. But now the Valley doesn’t have much inventory left either. We’ve already used up our safety net. So there’s a threat we’re going to see companies relocating out of province or it will limit their growth potential,” commented Chris MacCauley, Senior VP of Industrial at CBRE in Vancouver.
He warned that the province’s GDP growth could be adversely affected if businesses are deterred by a lack of available units.