Of British Columbia’s property markets, Fraser Valley has seen some of the most striking industrial sector growth in recent memory, according to Avison Young’s just-released Summer 2019 Fraser Valley, BC Industrial Report.
The 10-year average for annual industrial sales in the region has exceeded $300 million, and more than 200 transactions took place last year.
“The first half of 2019 continued to record significant industrial sales activity in the Fraser Valley with 105 deals valued at $185 million and will likely surpass 2018 in terms of deal velocity and match, if not exceed, dollar volume,” Avison Young principal Michael Farrell stated.
“Industrial vacancy throughout the Fraser Valley’s 62.7-million-square-feet industrial market remains at historic lows; and with the exception of Abbotsford, rental-rate appreciation has continued to manifest with all markets posting average asking net lease rates in excess of $10 psf.”
Feverish demand has pushed the region’s industrial market towards exceptionally tight conditions, and the roughly 3.4 million sq. ft. of new space to be completed by Q3 2020 will likely fail to improve vacancy levels, the report warned.
“Demand for industrial properties in the Fraser Valley remained exceptionally strong in 2018 and through the first half of 2019, with supply constraints serving as the only limiting factor on deal and dollar volume,” the analysis added.
“While Surrey and Langley continued to capture the majority of industrial sales activity in the Fraser Valley, Abbotsford and Chilliwack are increasingly emerging as destinations for new industrial development and subsequent sales and leasing activity. Rising lease rates and purchase prices have rippled outwards from the traditional core industrial markets of Burnaby and Richmond to those historically considered more peripheral.”