How The Fraser Valley Became Metro Vancouver's Dominant Industrial Region
Property availability has made the Fraser Valley Metro Vancouver's dominant industrial zone of late, Avison Young’s Michael Farrell tells us, with Surrey and Langley fuelling a record $391M in region-wide deals last year.
The Fraser Valley saw 214 industrial transactions in 2015. It was not the best year ever for volume (2011 had 226 deals), but industrial sales activity there outpaced Metro Vancouver competition, such as Richmond (105 deals, $268M) and Delta (39 deals, $133M). “What’s driving that is purely availability,” says Michael, with low interest rates helping propel property purchases. BC is a bright spot for GDP growth, he points out. For expanding industrial users seeking well-configured and relatively inexpensive sites (around $1M/acre at present), “south of the Fraser River is the only place to go in most cases."
Starline Architectural Windows acquired a 34-acre site at Surrey’s Campbell Heights Business Park for $24.8M. The manufacturer (its wares seen above) had long been looking to expand from its existing South Fraser location, Michael says, “and finally pulled the trigger on this.” (Starline plans to build a facility in excess of 400k SF in phases). Last summer's deal worked out to $725k/acre (net of development charges); today it would be closer to $1M, he notes. An investor at the end of 2015 paid $30M (including development charges) for a 20-acre industrial site in the same area (still a bargain versus north of Fraser rivals like Coquitlam or Burnaby).
Langley’s hot, too. A private-investor-owned manufacturing building at 5850 272nd St was acquired last summer for $28M. Storage For Your Life sold 19950 88th Ave (above) for $26.6M. Both were massive transactions for Langley, says Michael. In a $12.4M land deal, transportation firm Chohan Carries (Eternity Properties) bought a 9.5-acre site (20289 & 20345 102nd Ave). There have been murmurs that Molson Coors, which needs a minimum of 18 acres for a new brewery, could be eyeing the valley. “Not many sites could accommodate a facility like that," Michael says. "Most are in the Fraser Valley.”
Valley industrial leasing has been vigorous, “but now we’re kind of out of product,” Michael tells us. That’s spurred a pre-leasing uptick. At Golden Ears Business Park in Pitt Meadows, Building 100 (above) is 80% pre-leased, and 75% of Building 200, coming in Q2. At Campbell Heights North Business Centre, 19055 34A Ave, a 60k SF spec build (Q2 delivery), is 50% pre-leased. Of the 133k SF at Abbotsford’s 2195 and 2199 Queen St, (also scheduled for Q2) 32% is taken. In 2017, 550k SF comes online at Campbell Heights West and South Surrey Business Park, all of it built on spec. “Developers are encouraged by what they’re seeing,” Michael says.