Brokers Bullish on Industrial
Greater Vancouver CRE brokers are feeling bullish about the industrial market, says Colliers analyst Curtis Scott, who recently surveyed the sentiment of his firm's agents. Overall, the perception seems to be that the industrial sector is "really starting to step up," driven in large part by a US economy that's "bouncing back." So respondents told Curtis they expect to see significant increases in tenant demand, particularly for flex, service and manufacturing space.
Market watchers are keeping an eye on a new 126k SF mid-bay development that's being built on spec at 8385 Fraser Street — the former Sofina Foods building site — the first in Vancouver since Adera's Rivershore Business Park (pictured above) in 2012. Increased demand for industrial space means cap rates are expected to decrease, by up to 45% in the case of Class A industrial properties, and net effective rents will rise, by up to 67% for warehouse and distribution spaces, Curtis heard from the brokers he canvassed. "We're starting to see the industrial sector getting more confident."