Why We Should Fret About an Industrial Land Crunch
A flurry of industrial development across Metro Vancouver is bringing badly needed supply. But Avison Young industrial division VP Michael Farrell tells us land shortages loom, so there’s a mad scramble among developers to secure larger parcels for the next generation of projects—and they’re paying premium prices. “We’re seeing the base of ready-to-build industrial land shrinking quite quickly. After the next development cycle, we’re not sure where the land’s going to come from.”
Hopewell Development is building South Surrey Business Park on a 38-acre site at Campbell Heights Business Park (above). And Michael notes three other deals in the works for 90 acres will represent the balance of remaining ready-to-build land there. (Another several hundred acres is held by owners with no immediate intention to sell, he says.) Elsewhere, Onni Group’s developing Golden Ears Business Park in Pitt Meadows, and Dayhu Group is building Boundary Bay Industrial Park on 40 acres in Delta (below), but both sites are leasing quickly. “And if you wanted to go and replicate them, find 40 acres somewhere, you couldn’t."
It means Tier 1 users requiring land for large-scale logistics and distribution facilities—Costco Wholesale Canada, Amazon, Walmart, for example—are finding themselves out in the cold. “Their distribution centres can exceed 1M SF,” Michael says. “We don’t have that anywhere in Metro Vancouver.” (Some retailers are turning to Calgary to serve as an inland port for Metro Vancouver-bound goods.) Large-scale manufacturers who might want to locate in the region face the same reality—there’s no room. “We’re missing an opportunity because they end up going somewhere else."