This is the tenth consecutive quarter where the GVA’s industrial vacancy rate has been below 2.0%. With vacancy trending at historic lows development activity is at an all-time high with a record amount of space under construction. Pre-sale and pre-lease activity continue to be strong – 83% of new supply this quarter was occupied upon completion.
- The trend of rising lease rates is expected to continue due to the lack of options for space in the market coupled with strong demand. The current weighted average asking triple net rent has increased 25% from two years ago with year over year rates increasing each consecutive quarter by a positive amount since Q3 2015.
- The availability of vacant industrial land that is development-ready is severely limited, resulting in many developers purchasing infill sites with strong redevelopment potential and holding income in order to land bank.
- Strata developments capable of accommodating users who wish to own in the range of 20,000 square feet up to 100,000 square feet have effectively replaced the small lot subdivision. Strata values have increased significantly over recent years and developing strata projects is far more efficient than developing small standalone buildings.
- Developers are pushing the cubic capacity to 32' clearances or better to meet market demand.
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