Rent prices for industrial land are rising weekly due to land shortages

Demand for industrial space is also high around the Metro Vancouver, with average prices hitting record highs.

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According to analysts, shortages of industrial land and rising prices have led to more volatile rents on the edge of Metro Vancouver.

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Some industrial landlords no longer post offer rents and instead rent them to the highest bidders. Others don’t want to fix the rate in the long run.

Some developers of industrial geological units believe that units are slow to sell and that withdrawing some units will result in higher prices later.

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What does this all mean for local businesses and consumers?

“Unless you’re a real estate developer or real estate owner, I think it’s almost universally bad,” said Michael Farrell, principal of Abison Young, who specializes in industrial property.

“But even some of those groups may be willing to admit that some of the price increases are probably unhealthy, or at least unsustainable.”

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The landlord set an average semi-annual or quarterly asking rent, but the demand is so high that it is now possible to raise the rent for each new rental agreement in the market.

Companies are eager to fix rents before prices rise further. Developers and investors, on the other hand, see the potential for higher rents and more money to buy, sell or lease industrial property in hierarchical units, especially in low interest rate environments. I’m paying.

Chris Morrison, Vancouver-based Executive Vice President, said: Colliers International’s president of industry released a national snapshot this week, including some of these details.

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According to the Koreas, the average rental demand rate for industrial property in Metro Vancouver reached a high of $ 16.93 per square foot in the first quarter of 2022.

For years, Metro Vancouver’s industrial space vacancy rate remained at 1-2%, but in the second quarter of 2021, it dropped to 0.5% and is now 0.4%. increase.

For a building Morrison had rented in Sally, the asking rent per square foot has risen by more than 7% from six weeks ago to today.

“We don’t say weekly (price changes), but we need to check weekly to make sure the prices mentioned above are still valid,” said Farrell of Avison Young.

Steve Brook, Senior Vice President of CBRE, has one result: properties near city centres such as Richmond and Burnaby used to set higher prices, but Sally and Langley, it’s farther away.

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In February, developer Beady defeated 14 other bidders to buy 22 acres of vacant industrial land in Delta for $ 117 million, according to Brooke, who was involved in the deal.

“This is a very exciting time for industrial owners and the asset class is now very popular,” said Mark Goodman of Goodman Commercial.

His company, well-known for its multi-family housing deals, recently sold a car showroom property on 19,500-square-foot land on West Fifth Avenue in Vancouver for more than $ 25 million.

“In fact, we created an unpriced list and received over 80 inquiries from key developers, owner users, and other car dealer owners in a two-week whirlwind.”

CBRE’s Brooke believes that these prices may be heading towards “equal to other global markets such as Seattle and Auckland.”

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According to Farrell of Abison Young, some companies were using more industrial space in Calgary than others because they couldn’t get the space they needed in Vancouver.

But last winter, “All the highways and railroads between us and Calgary were torn by a single rain event. Suddenly, we crossed the (several) mountains to supply the Metro Vancouver market. The idea of ​​having a lot of commodities and consumer goods seems like a bad idea. “

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Rent prices for industrial land are rising weekly due to land shortages

Source link Rent prices for industrial land are rising weekly due to land shortages

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