Owners of industrial real estate in Vancouver are enjoying a surging market right now and the sector has posted the largest rent rises in the world!
A report from real estate firm CBRE shows that Vancouver’s industrial & logistics leasing rates increased 29.1% this year as the vacancy rate fell to 2.4%, the lowest in North America.
The average year-over-year rise for industrial & logistics globally is 3.2%, increasing from 2.2% in the previous 12 months.
“These price increases are a result of continued dwindling industrial supply, doubling occupier demand and continued growth of Vancouver’s population,” said Jason Kiselbach, Vice President and Sales Manager at CBRE Vancouver. “This is a testament to Vancouver’s growing economy and strong retail consumer spending. Industrial users understand the value of having port access and proximity to a growing population that is increasingly demanding expedient delivery of products and services.”
Despite the sharp rise for Vancouver’s leasing rates the city still represents a relatively affordable location, only ranking at 25th most expensive markets in the sector.
Hong Kong (USD $30.99), London (USD $22.35) and Greater Tokyo (USD $19.96) are the top three most expensive markets.
Tenants should lock in rates now
The rising leasing rates in Vancouver are in tandem with other increasing costs for industrial and logistics tenants in the market and Kiselbach has some advice for businesses.
“This should however serve as a wake-up call for the smaller, family-owned, industrial businesses that have seen, not only an increase in rental rates, but in a number of other costs as well, including property taxes, wages and transportation. These businesses need to consider locking in rates now with early, long-term renewals to hedge against further cost increases,” he advises.
More market update: