The Metro Vancouver Regional Industrial Lands Strategy Report, released June 2020, found the region, as of 2015, had approximately 28,000 acres of industrial land, but that 80 per cent of that had already been developed.
“Demand is outpacing the market’s ability to provide space,” the report warned. “Businesses are faced with either renewing leases at notably higher rates, or relocating further away from the region’s core markets.”
That relocation has already started and Abbotsford has become a prime destination.
The eastern Fraser Valley community, once seen as a lower-cost safety valve for surging Metro industrial demand, is now posting prices rivalling major Metro markets.
Only 1.1 per cent of Abbotsford’s 8.8 million square feet of industrial space is vacant, according to a third-quarter survey from Colliers International.
There is 460,000 square feet of new industrial buildings are currently under construction in Abbotsford, representing nearly 14% of all industrial development in the Lower Mainland.
“The Abbotsford industrial market has exploded,” confirmed a November 2020 report from Valley-based Frontline Real Estate Services Ltd., characterized by industrial property sales more than tripling over the past five years.
In 2019, a record 34 transactions totalling $82 million were seen in West Abbotsford’s industrial district, up from 22 sales worth $50 million a year earlier.
“2020 continued to see insatiable demand and new price records across all property types, despite the outbreak of a global pandemic and looming economic uncertainty,” said Frontline agent Braydon Hobbs, who prepared the industrial report with co-agent Todd Bohn.
Even decades old freestanding buildings are achieving record prices, available development land is difficult to find and strata sellers are nearly nonexistent, meaning buyers must wait for new developments to come to market to secure industrial space, Bohn said.
In the first nine months of 2020, 10 industrial properties and one land sale represented a total sales volume of $34.7 million. Transactions were down from 2019, but the sales value increased, an indication of the rising prices. A new trend now is strata industrial, with at least two such light-industrial projects now underway.
Abbotsford industrial land prices now start at $2.3 million per acre, Frontline reports, while strata warehouse space is selling for from $280 to $320 per square foot. Industrial lease rates are pushing $12 per square foot for prime space, only slightly lower than the average in Surrey and Richmond.
With a tight 1.6 per cent vacancy rate for light-industrial space, Abbotsford is facing a shortage of land that can accommodate such use.
The City of Abbotsford has even launched a “space sharing” program for industrial users. The unique service allows businesses to collaborate by sharing space and saving money by splitting the cost of property taxes.