The industrial real estate market in Metro Vancouver is notoriously tight, with vacancy rates as close to zero as you can get -- 0.2% according to a Q4 2022 Colliers report -- and that has forced many to examine secondary solutions.
Those possibilities include looking more at creative multi-level "stacked" industrial spaces, which are increasingly common in Metro Vancouver, or even migrating operations across the border to Alberta in more drastic cases.
A more moderate solution is looking towards some of the regions just outside Metro Vancouver, where development is not constantly churning like it is in core cities, which means more land suited for industrial projects is available, and often at lower prices.
Just this week, three notable companies announced land acquisitions in municipalities just outside Metro Vancouver, in what could be interpreted as a reflection of those tight market conditions.
On Thursday, Vancouver-based Hungerford Properties announced that it had acquired a 3.83-acre site at 5721B Production Way in Langley, minutes away from the future site of the 196th Street Station coming as part of the Surrey-Langley SkyTrain extension.
The site currently consists of two industrial buildings built in the 1970s, and Hungerford says its planning to develop two multi-tenant light industrial buildings with over 100,000 sq. ft of space, with the firm working on their development permit this year and construction hopefully starting by early 2024.
In a press release, Michael Hungerford, a partner at Hungerford Properties, referenced the tight conditions of Metro Vancouver, noting that "the current vacancy rate in GVA's industrial market is at 0.2% and 0.0% in Langley" and that their newly acquired site "offers a strategic location with exposure to one of Metro Vancouver's tightest industrial markets."
Also announced on Thursday was an industrial land acquisition made by BC-based Denciti Development Corporation, who purchased a 1.56-acre site in Squamish, just off of Highway 99. Denciti simultaneously announced the land acquisition of a 1.75-acre site in Kelowna, assembled via nine non-industrial properties.
Both acquisitions closed in January, and Denciti is now planning an industrial project for the Squamish site and a multi-family residential project for the Kelowna site.
Speaking on the acquisitions, CEO of Denciti Garry Fawley also alluded to the "undersupply of industrial space" in British Columbia, with Darren McCartney of RE/MAX Sea to Sky Real Estate adding that Squamish "is experiencing increasingly low availability for industrial space due to high demand and land constraints" similar to what Metro Vancouver is experiencing.
And last but not least, energy drink company Red Bull announced earlier this week that it had acquired a 15-acre site in Chilliwack within the Chilliwack Food and Beverage Processing Park -- also referred to as Kerr Avenue Business Park -- close to Highway 1, with the site to serve as the company's first ingredient facility in North America as it continues to expand operations.
The announcement was made by the City of Chilliwack and the Chilliwack Economic Partners Corporation, with Mayor Ken Popove calling it a "fantastic investment" in the city. He did not make reference to tight industrial real estate conditions, but did allude to an "extensive Canadian site selection process" that the group went through together before deciding on the Chilliwack property.
Industrial market conditions outside of Metro Vancouver are tightening, but they could still be an increasingly-popular solution. One could say it gives an "outside chance" to companies who want to stay in the province. Or, to borrow Red Bull's slogan, one could say it may just give you wings.
