Only 2 per cent of Metro Vancouver’s nearly 200 million square feet of industrial space is vacant, representing Canada’s tightest industrial market and one marked by soaring land prices and rapid take-up of new developments.
“Without question, the current industrial market is the strongest Beedie has experienced in its 63-year history,” said Beedie Development Corp. president Ryan Beedie as the veteran developer broke ground on the largest industrial project underway in the Metro region.
Beedie’s Delta Link Business Park started last week with a two-phase 533,765-square-foot development in the Tilbury area. In all, the development will cover more than one million square feet across seven buildings.
Beedie bought the 103-acre site in 2015 and allocated 84 acres for industrial use. The site is linked to the South Fraser Perimeter Road, a four-lane expressway that opened in 2013 and runs along the south side of the Fraser River from Delta to Langley.
The largest of seven industrial projects now underway in Delta, the first phase of Delta Link Business Park is already 70% leased or sold, though the first buildings won’t open until next year.
The quick take-up does not surprise Avison Young, which notes that Delta now dominates Metro’s big-space industrial landscape. With 27.1 million square feet of industrial real estate, the Fraser Valley municipality has a 3.4 per cent vacancy rate, the agency said, with 1.3 million square feet under construction.
Strong demand for large distribution and logistics space is leading the charge. The BC Liquor Distribution Branch, for example, has leased 412,000 square feet in Delta’s Tilbury Industrial Park, managed by GWL Realty Advisors.
Delta Link Business Park’s new tenants include Leon’s Furniture, taking 434,000 square feet, Swiss Water Decaffeinated Coffee Co. and North Delta Seafoods.
Delta is also seeing near-record sales of industrial property, with more than $223 million in transactions in 2016, just off the all-time high set three years earlier, Avison Young added.
CBRE confirmed Metro’s big industrial shift has been seen south of the Fraser River.
“The South Fraser Perimeter Road has been a game-changer,” noted Jason Kiselbach, an associate vice-president with CBRE. The 10-lane bridge replacement for the George Massey Tunnel, which broke ground this month, could be another.
The infrastructure has already been a price-changer. According to a study released at the Vancouver Real Estate Forum in April, the price of an acre of Metro Vancouver industrial real estate has accelerated to an average of $1.4 million, up from $1 million two years ago; 64 per cent of the demand is in Delta and Surrey. In Delta, according to Avison Young, industrial properties now sell for an average of $230 per square foot, with prime sites spiking above $650 per square foot.