Demand for Vancouver industrial space still high despite rising rates

Average price per square foot for the asset class continued to increase

Demand for Vancouver industrial space still high despite rising rates

Industrial assets in Metro Vancouver continued to be highly sought after, in defiance of the elevated-rate environment.

“Despite multiple interest rate hikes, demand for industrial strata remains unwavering and the average price per square foot continues to increase, albeit at a lower rate than in previous years of the same quarter,” Avison Young said.

The market saw its average price psf of industrial space reach $579 in the first quarter, far above the pre-pandemic average of $335 seen in Q1 2020.

“Across the Metro Vancouver region, seven out of eleven submarkets have seen steady since 2020, including Maple Ridge with a 23% increase to the $/psf in Q1 2023 versus Q1 2022,” Avison Young said.

Overall, “despite macroeconomic headwinds and aggressive interest rate hikes by the Bank of Canada, industrial strata remains a strong investment option in the Metro Vancouver region,” Avison Young said.

In its recent analysis, RE/MAX made a similar observation on the Vancouver commercial market.

“Industrial remains the top performing sector in Greater Vancouver with vacancy rates under 1%,” RE/MAX said. “Consistent demand exists for warehousing and distribution space throughout the GVA, with conditions tightest in suburban areas outside Vancouver Proper in Richmond, Delta, Burnaby, and Langley.”