Oxford Properties Group has broken ground on Canada’s first large scale multi-level industrial complex, despite the fact that no tenants have been signed for the 437,000-square-foot, two storey project in Burnaby’s Riverbend Business Park.
Oxford has transformed the 64-acre brownfield site – once a paper mill and landfill - into a 1.3-million-square-foot master planned business park. Oxford first announced in November 2019 its intention to build the two-storey project on a speculative basis. With all municipal approvals received, the building has now broken ground with anticipated completion within two years.
The ground floor comprises 437,000 square feet with 32-foot clear heights. The second storey, which is accessible to full-size transport trailers via a heated ramp, consists of 270,000 square feet, with 28-foot clear heights and a 130-foot truck court with dock loading doors.
Jeff Miller, Oxford’s head of industrial development, confirmed that no leases have yet been signed for the project, which, like all of the business park, it is being built on speculation.
“We’re a long-term investor and owner, so the asset will be leased versus sold as strata,” an Oxford spokesman confirmed.
Average net industrial lease rates in Burnaby are $14.12 per square foot, based on recent industry surveys, but new space can see higher rates.
Miller noted that two-level industrial facilities are more complicated to build than standard single-storey structures and typically cost two-and-a-half to three times as much to construct.
The first three buildings completed on spec at Riverbend Business Park, ranging from 199,498 square feet to 209,993 square feet, are now fully leased. A 92,863-square-foot building was completed earlier this year and has had strong leasing activity, according to Miller. The smallest building, at 78,436 square feet, is under construction and 70 per cent leased.
Anticipated for completion in November 2022, the buildings at Riverbend Business Park can provide a single customer 707,000 square feet of contiguous space, the largest available industrial property in Metro Vancouver. Located near the intersection of Marine Way and Highway 91A in Burnaby, it will serve a population of 1.4 million within a 30- minute drive, according to an Oxford release.
Demand for distribution space, particularly consumer good shipping, is expected to drive leasing demand at the project.
“The pandemic has accelerated the penetration of e-commerce into our daily lives and will put additional demand for infrastructure such as logistics space to service the growing digital economy,” Miller said.
Metro Vancouver recorded 1.1 million square feet of positive net absorption in the third-quarter of 2020, extending the region’s record-setting run of interrupted positive industrial absorption to a full seven years. The region has a 1.7 per cent industrial vacancy rate, tied with Toronto as the tightest among the largest Canadian cities, according to Colliers International.
Oxford’s total Canadian industrial footprint now comprises 14.3 million square feet with $2.3 billion of assets under management, and a development pipeline of up to six million square feet across Vancouver, the Greater Toronto Area, Edmonton and Calgary.
The buildings at Riverbend Business Park earned Oxford the 2019 City of Burnaby Environmental Award. With all buildings built to LEED (Leadership in Energy and Environmental Design) standards, the business park amenities include a pier overlooking the Fraser river and walking trails that connect to the public trail system.