Takeup of industrial space in Metro Vancouver rose sharply in the third quarter, with more than 1.1 million square feet leased compared with negative absorption in the second quarter, according to a survey by Cushman & Wakefield.
Lease rates have stabilized, the survey found, while industrial land values have remain unchanged.
"[Land] prices average between $1.1 million and $1.6 million per acre in most of the [suburban markets]." The least-expensive serviced industrial land is in Maple Ridge, with prices starting at $600,000 per acre. The most expensive land is found in North Vancouver, where an acre of serviced land starts at $2 million and the industrial vacancy rate is 2 per cent.
The price of serviced land has remained high, analysts say, simply because there is little of it. Many former industrial sites have been converted to housing or mixed-use retail and residential projects. As well, some municipalities are relucant to rezone land for industrial use.
Warehouse lease rates across the region range from $6.80 to $9.80 per square foot, unchanged from a year ago.
The industrial vacancy rate in the region has fallen to 4.2 per cent, down from 4.7 per cent at mid-year, despite 1.9 million square feet of new supply coming to the market, an estimated half of it in speculative plays.
A further 1.4 million square feet of industrial is now under construction in the Metro area, with most of the building activity being seen in Richmond, Delta and Burnaby.
The positive absorption is an indicator that "the overall industrial market is getting healthier," said Cushman & Wakefield vice-president Lee Hester.
from Western Investor, December 2010
