Opportunities in Metro Vancouver's Light Industrial Market
Mark Kurkdjian & Sukh Pannu | April 28th, 2023.
The Metro Vancouver light industrial market is a key component of the region's thriving economy. In this April 2023 market update, we provide insights on the area's availability, leasing activity, and average asking rates for industrial spaces. We aim to offer valuable information for stakeholders to make informed decisions in the ever-changing industrial landscape.
Key Findings:
Newly Available Industrial Spaces: Eighty-one spaces have become available in the past thirty days, with the majority falling between 2,000 and 4,999 sq. ft. Abbotsford and Burnaby lead the way, contributing 25% and 22% of the newly available space, respectively.
Industrial Spaces Leased: In the same period, fifteen industrial spaces were leased, the largest being a 48,830 sq. ft. building in Surrey. Surrey and Abbotsford witnessed the highest leasing activity, with 29.51% and 21.19% shares, respectively.
Spaces Taken Off the Market: Thirteen spaces were taken off the market in the past thirty days, the most significant being a 146,732 sq. ft. sublease in Abbotsford.
Average Asking Rates: The estimated average asking rate for April 2023 is $20.03 per sq. ft., an 11% increase from the previous year, continuing a multi-year trend of growth rates.
Newly Available Industrial Spaces
In the past thirty days, eighty-one industrial spaces have become available in Metro Vancouver with the following distribution:
12 Spaces less than 2,000 sq. ft.
39 Spaces between 2,000 and 4,999 sq. ft.
12 Spaces between 5,000 and 9,999 sq. ft.
9 Spaces between 10,000 and 19,999 sq. ft.
7 Spaces between 20,000 and 49,999 sq. ft.
2 Spaces greater than 50,000 sq. ft.
The Top Five Vacancies were:
146,730 sq. ft. in three separate units at 2200 Iron Mills Court in Burnaby,
34,070 sq. ft. building at 5744 198 Street in Surrey,
25,360 sq. ft. building at 20203 113B Avenue in Maple Ridge
23,568 sq. ft. unit at 2555 Douglas Road in Burnaby.
The largest percentage of newly available industrial space was found in Abbotsford and Burnaby, representing 25% and 22%, respectively, of the total new area made available. Vancouver came in third place, with 16%. The remaining industrial spaces were located in Surrey, Richmond, Port Coquitlam, Maple Ridge, Langley Township, Delta and Coquitlam, making up 37% of the total available industrial space for the month.
Industrial Spaces Leased
Over the past thirty days, fifteen industrial spaces were leased, with the following distribution:
2 Spaces less than 2,000 sq. ft.
1 Spaces between 2,000 and 4,999 sq. ft.
6 Spaces between 5,000 and 9,999 sq. ft.
3 Spaces between 10,000 and 19,999 sq. ft.
4 Spaces between 20,000 and 49,999 sq. ft.
No Spaces greater than 50,000 sq. ft. were leased.
The Top Five Leased Spaces were:
48,830 sq. ft. building at 5744 198 Street in Surrey,
44,000 sq. ft. building at 3707 Mount Lehman Road in Abbotsford,
23,680 sq. ft. building at 27316 Gloucester Way in Langley Township,
20,040 sq. ft. building at 323 West 6th Avenue in Vancouver
16,183 sq. ft. unit at 6900 Graybar Road in Richmond.
Surrey and Abbotsford saw the most leasing activity at 29.51% and 21.19%, respectively, followed by Richmond at 15.29%and Vancouver at 12.24%. Langley Township, Port Coquitlam, Delta and Burnaby comprise 21.75% of the leased space.
Surrey had the highest leasing activity at 30%, while Abbotsford came in second with 21% of the total leased space. Richmond followed with 15%, and Vancouver had 12% of April 2023's leased space. The remaining leased areas were in Langley Township, Port Coquitlam, Delta, and Burnaby, accounting for 22% of the total leased space.
Spaces Taken Off the Market
Over the past thirty days, thirteen industrial spaces were removed from the market. The most notable removal was the sublease at 7260 Winston Street in Abbotsford, which had brought 146,732 sq. ft. of sublease space to the market. Additionally, for-sale listings were removed from the market, including 40,444 sq. ft. at 12835 Lilley Drive in Maple Ridge and 24,770 sq. ft. at 20445 62nd Avenue in Langley Township.
Estimated Industrial Average Asking Rates ($/sq.ft.) in Metro Vancouver
April 2023: $20.03 11% increase
April 2022: $18.01 18% increase
April 2021: $15.29 6% increase
April 2020: $14.42 7% increase
April 2019: $13.49 12% increase
April 2018: $12.09 12% increase
April 2023's Insights
The Metro Vancouver light industrial market is exhibiting a robust performance with a notable increase in availability and leasing activities. The data from April 2023 highlights the demand for spaces ranging from 2,000 to 4,999 sq. ft., suggesting that small to medium-sized businesses are seeking to expand their operations within the region. Abbotsford and Burnaby emerge as the most active submarkets, offering ample opportunities for businesses and investors.
The continued growth in leasing activity, particularly in Surrey and Abbotsford, indicates a thriving industrial sector driven by the region's strong economy. However, the escalating average asking rates, with an eleven percent increase from the previous year, signal a need for careful evaluation. This trend, coupled with the fact that larger spaces (>50,000 sq. ft.) remain vacant, suggests that businesses may opt for more modestly-sized spaces or prioritize strategic locations within the region.
Metro Vancouver light industrial market stakeholders should closely monitor availability, leasing activities, and average asking rate trends. By doing so, they can identify the most suitable business or investment portfolio opportunities. Focusing on small to medium-sized spaces and the thriving submarkets of Abbotsford, Burnaby, and Surrey will likely yield the most promising prospects. As the market evolves, adaptability and informed decision-making will be crucial for success in the competitive Metro Vancouver industrial landscape.
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