Vancouver industrial market sets a North American record

Red-hot demand pushed market investment activity past a key milestone in Q1

Vancouver industrial market sets a North American record

Vancouver’s industrial real estate market currently has the lowest vacancy rate in all of North America at 0.5%, according to a new analysis by Avison Young.

“Industrial investment activity surpassed the half-billion-dollar mark in the first quarter of 2022,” Avison Young said. “Delivery of new space for lease was unable to alleviate chronically tight vacancy as majority is preleased through 2022.”

Lease rates also reached a new record high, with the Metro Vancouver average reaching $18.09 per square foot.

“With extreme scarcity of product available for purchase, no major pricing adjustments are expected to occur in the near term.”

Read more: Commercial property demand sky-high: report

However, this red-hot market is also likely to decelerate and return to pre-pandemic levels as the Bank of Canada continues to hike its benchmark interest rate this year.

“But this anticipated market calmness is not a major cause for concern. Even after the market experienced more than a decade of exceptionally robust demand, the COVID-19 pandemic induced two years of accelerated growth,” Avison Young said.

“Normalcy, as it relates to the market’s frenetic nature, may return. But there is still an extremely high need for industrial space across the region, and traditional market pressures – ongoing strong demand, lack of new and existing supply, and perpetually tight vacancy – will prevail for years to come.”