Q1 2019 recorded the lowest vacancy rate in over a decade at 1.2%. A record amount of industrial space is under construction, but new supply is being outstripped by demand. For example, this quarter 50% of Delta iPort Building 2, a tier-1 distribution centre totaling to 484,920 square feet, is now pre-leased to a new long-term tenant. Given the existing tight market conditions, increasingly tenants are having to plan well ahead in order to secure space. With the lack of options there is upward pressure on sale values and lease rates – this quarter saw a record high for weighted average asking net rent at $11.36 per square foot.
- The Metro Vancouver industrial vacancy rate of 1.2% in Q1 2019 remains well below the five-year average of 2.3% and 10-year average of 3.2%. Vacancy has been below 2.0% for eight consecutive quarters.
- 418,643 square feet of new supply came to market this quarter with 62,000 square feet or 14.8% of total new supply being build-to-suit. Out of the remaining speculatively developed supply approximately 80% was pre-sold or pre-leased. Over the past five years the average amount of new supply per quarter was 781,262 square feet.
- There was 1,213,806 square feet of positive absorption in Q1 2019. This is an increase from the previous quarter’s absorption of 655,752 square feet. Vancouver has now recorded 23 consecutive quarters of positive absorption which highlights the consistently strong market demand.
- Delta iPort Building 2 is currently available for pre-lease and will be available for occupancy October 1, 2019. The remaining leasing options for this tier-1 distribution centre are 121,230 square feet or 242,460 square feet.
- Richmond Industrial Centre (“RIC”), a project by Montrose Property Holdings Ltd. and Omicron Canada Inc., has now leased 100% of Building 3. Currently Building 4 is being offered as a customizable build-to-suit opportunity that can be ready for occupancy as early as January 2021. Building 4 will accommodate tenants up to 300,000 square feet.