Overall, industrial demand has remained at an elevated level while supply remains constrained across the Thompson Okanagan region. The industrial market is particularly active in Kelowna, resulting in another drop in the vacancy rate and increased construction levels throughout the city. Conversely, for the first time in three years, Vernon's industrial vacancy rate spiked as a result of two large buildings being vacated in the city.
- Several sales and leases of larger vacant industrial buildings have reduced Kelowna's vacancy rate from 2.50% in Q2 2017 to 1.82% in Q4 2017.
- Both developers and owners have started to respond to lack of available space in Kelowna, adding 120,625 square feet of new inventory in the last six months. Almost half of these buildings were owner-user builds, which were fully occupied upon completion.
- Vernon added no new supply over the last six months, however construction is expected to start in the coming months on a brand new 15,000 square-foot multi-tenant warehouse, which is currently pre-leasing for $10.85 per square-foot.
- Following a period of improvement in Q2 2017, lease rates in Vernon have returned to Q4 2016 levels in response to the rise in the vacancy rate.
( PDF Document 871 KB )