Industrial real estate sales in the British Columbian locales of Richmond and Delta established new records in terms of dollar volume last year, a trend that also largely carried through the first nine months of 2019, according to a new market analysis by Avison Young.
Richmond enjoyed 79 industrial transactions in 2018, totalling a record $331.3M. Meanwhile, Delta’s 53 industrial sales drew in a massive $396.6 million, which considerably surpassed all previous deal (46) and dollar volume ($238.6 million) records in the locale.
Avison Young attributed the larger number of new stata projects as a major driver in the phenomenon. This “boosted both deal and dollar volume as business owners were able to secure new premises in a market with very few acquisition options other than strata units and even fewer options to lease.”
“The pricing being achieved for strata units – which also supports higher per-square-foot rental rates – provided owner-occupiers who own freestanding buildings with a gauge to what pricing could be achieved for their properties,” Avison Young explained further.
This drove many industrial property owners to hold on to their assets as value and rent growth accelerated to a fevered pitch between 2015 and 2017, the report added.
These trends characterized both markets for much of this year, as well.
“While a lack of new supply – combined with record-low industrial vacancy – in Richmond and Delta have limited the number of lease transactions (especially for new entrants) during the past 12 months, sales activity has remained strong,” Avison Young stated.
However, the two markets did not react to the added strata supply in the same manner.
“Strata sales grew to comprise a significant amount of the sales volume in Richmond; however, that was not the case in Delta,” the report elaborated.
“And while the total dollar volume of Delta industrial sales was drastically skewed by three transactions valued at more than $242 million, there were no singular significant Richmond sales in terms of value. Instead, there were substantially more sales, particularly strata units, during the same period.”