First Quarter 2016 Market Update INDUSTRIAL MARKET | Q1 2016 STEFAN MORISSETTE* | SEAN BAGAN COLLIERS INTERNATIONAL > METRO VANCOUVER STEFAN MORISSETTE* 604 692 1428 [email protected]SEAN BAGAN 604 661 0821 [email protected]COLLIERS INTERNATIONAL 200 Granville Street, 19th Floor Vancouver, BC V6C 2R6 604 681 4111 www.collierscanada.com Market Indicators Relative to prior period Q1 2015 Q1 2016 Trend VACANCY 3.6% 1.7% YTD NET ABSORPTION (SF) 1,774,088 1,047,454 YTD NEW SUPPLY (SF) 1,107,954 164,800 UNDER CONSTRUCTION (SF) 1,251,510 4,160,345 AVERAGE ASKING NET RENT* $8.03 $8.26 *Average Asking Net Rent is calculated using a weighted average Metro Vancouver Market Overview In 2015, the Lower Mainland industrial market saw un- precedented activity with over 5,000,000 square feet of positive absorption, more than double the 10 year average. This activity has continued in to 2016 with over 1,000,000 square feet of absorption in the first quarter bringing the overall vacancy rate to 1.7%, down from 3.6% this time last year. This is the first time we have seen vacancy below 2% since before the 2008 economic crash. The story in 2016 will be centered around supply. With such a limited amount of vacancy and new development scheduled for completion this year, tenants and purchasers have very limited options to choose from. This has caused prices for properties for sale to increase and we expect to see moderate increases in lease rates for the balance of the year. 2017 should ease some of the supply constraints with a number of new developments scheduled for completion; however if current demand continues, this supply may be absorbed quickly. Please click the following link for the full first quarter in- dustrial report and statistics (http://www.collierscanada.com/ en/news/2016/metro-vancouver-industrial-market-highlights- q1-2016#.VyegcPkrKUk), and please see below for our suc- cessfully completed industrial transactions completed this quarter. As always, please do not hesitate to contact us with any questions. Q1 2016 Vacant Space by Property Size (SF) 0 500,000 1,000,000 1,500,000 2,000,000 Delta Richmond Burnaby Vancouver Surrey New Westminster Langley Coquitlam Port Coquitlam Ridge-Meadows North Vancouver Abbotsford Chilliwack Port Moody Bulk/Logistic (>100,000) Large (30,000-100,000) Mid (5,000-30,000) Small (0-5,000) Market Trends and Forecast -500,000 500,000 1,500,000 2,500,000 0.5% 1.5% 2.5% 3.5% 4.5% New Supply (SF) Net Absorption (SF) Current Qtr Vacancy Rate Stefan Morissette* Associate Vice President | Industrial Direct: 604-692-1428 Email: [email protected]Sean Bagan Junior Associate Direct: 604-661-0821 Email: [email protected]
11 Research & Forecast Report | First Quarter 2016 | Metro Vancouver / Industrial | Colliers International
Metro Vancouver Market Overview
Market OverviewWith GDP growing at 3.9% in 2015, Metro Vancouver’s economy was ranked the top performing regional economy in Canada by the Conference Board of Canada. The manufacturing sector in Metro Vancouver has recorded consistent growth over the last few years, averaging an annual output of 3.4% from 2011-2015. With a depressed Canadian dollar and strengthening U.S. economy, foreign demand for Canadian goods will rocket exports to new heights, enabling the Vancouver manufacturing sector to achieve 4.7% projected growth in 2016.
With a lack of new supply in the first quarter of 2016, regional vacancy declined to an unprecedented low of 1.7%. Demand continues to surge in the industrial market, but as a result of a highly-constrained supply of developable industrial land and the rezoning of older industrial product towards light industrial or office uses, space is becoming more and more scarce and the disparity between supply and demand continues to grow. Relative to previous quarters, leasing activity continues to decline, with absorption falling from ~1.7 million square feet in Q1 2015 to ~1 million square feet in Q1 2016. That being said, with nearly 4.2 million square feet of new supply under construction over the next 24 months, the market should experience slight relief, offering up more opportunities for tenants and alleviating pressure on demand over the long-term.
Investment MarketThe industrial investment market remains strong, particularly as investors and end-users react to the apparent shortage of available industrial land. Due to this phenomena,and a low interest rate environment, industrial strata product has surfaced as a more viable option for developers and investors. The cost of land and cost of construction has made developers look for other alternatives to lease. Since 2006, total industrial land sale volume exceeded $2.7 billion, with an average annual investment volume of $270 million. 2007 was the strongest year with $388 million, and as of Q3 2015 total investment volume is approximately $286 million. Over the last 10 years, Surrey (32%), Richmond (10%), and Burnaby (10%) represent just over half the sales volumes.1Source: Conference Board of Canada
Market IndicatorsRelative to prior period Q1 2015 Q1 2016 Trend
VACANCY 3.6% 1.7%
YTD NET ABSORPTION (SF) 1,774,088 1,047,454
YTD NEW SUPPLY (SF) 1,107,954 164,800
UNDER CONSTRUCTION (SF) 1,251,510 4,160,345AVERAGE ASKING NET RENT* $8.03 $8.26 *Average Asking Net Rent is calculated using a weighted average
Market Trends and Forecast
Metro Vancouver Land Supply ReportThe recently released Metro Vancouver Inventory Report covered the current and future state of Metro Vancouver’s industrial market. Some salient points from this comprehensive report include the average annual net absorption of land in Metro Vancouver was approximately 938 acres over the period of 2010-2015 and that the “vacant’ industrial land supply might be substantially absorbed by the 2030s.
Q1 2016 Vacant Space by Property Size (SF)
Source: Metro Vancouver 2015 Industrial Lands Inventory, April 2016
-500,000
500,000
1,500,000
2,500,000
0.5%
1.5%
2.5%
3.5%
4.5%
New Supply (SF) Net Absorption (SF) Current Qtr Vacancy Rate
0
500,000
1,000,000
1,500,000
2,000,000
Delta
Rich
mon
d
Burn
aby
Vanc
ouve
r
Surr
ey
New
Wes
tmin
ster
Lang
ley
Coqu
itlam
Port
Coqu
itlam
Ridg
e-M
eado
ws
North
Van
couv
er
Abbo
tsfo
rd
Chilli
wac
k
Port
Moo
dy
Bulk/Logistic (>100,000) Large (30,000-100,000)
Mid (5,000-30,000) Small (0-5,000)
Metro Vancouver Market Overview
In 2015, the Lower Mainland industrial market saw un-precedented activity with over 5,000,000 square feet of positive absorption, more than double the 10 year average. This activity has continued in to 2016 with over 1,000,000 square feet of absorption in the first quarter bringing the overall vacancy rate to 1.7%, down from 3.6% this time last year. This is the first time we have seen vacancy below 2% since before the 2008 economic crash. The story in 2016 will be centered around supply. With such a limited amount of vacancy and new development scheduled for completion this year, tenants and purchasers have very limited options to choose from. This has caused prices for properties for sale to increase and we expect to see moderate increases in lease rates for the balance of the year. 2017 should ease some of the supply constraints with a number of new developments scheduled for completion; however if current demand continues, this supply may be absorbed quickly. Please click the following link for the full first quarter in-dustrial report and statistics (http://www.collierscanada.com/en/news/2016/metro-vancouver-industrial-market-highlights-q1-2016#.VyegcPkrKUk), and please see below for our suc-cessfully completed industrial transactions completed this quarter. As always, please do not hesitate to contact us with any questions.
11 Research & Forecast Report | First Quarter 2016 | Metro Vancouver / Industrial | Colliers International
Metro Vancouver Market Overview
Market OverviewWith GDP growing at 3.9% in 2015, Metro Vancouver’s economy was ranked the top performing regional economy in Canada by the Conference Board of Canada. The manufacturing sector in Metro Vancouver has recorded consistent growth over the last few years, averaging an annual output of 3.4% from 2011-2015. With a depressed Canadian dollar and strengthening U.S. economy, foreign demand for Canadian goods will rocket exports to new heights, enabling the Vancouver manufacturing sector to achieve 4.7% projected growth in 2016.
With a lack of new supply in the first quarter of 2016, regional vacancy declined to an unprecedented low of 1.7%. Demand continues to surge in the industrial market, but as a result of a highly-constrained supply of developable industrial land and the rezoning of older industrial product towards light industrial or office uses, space is becoming more and more scarce and the disparity between supply and demand continues to grow. Relative to previous quarters, leasing activity continues to decline, with absorption falling from ~1.7 million square feet in Q1 2015 to ~1 million square feet in Q1 2016. That being said, with nearly 4.2 million square feet of new supply under construction over the next 24 months, the market should experience slight relief, offering up more opportunities for tenants and alleviating pressure on demand over the long-term.
Investment MarketThe industrial investment market remains strong, particularly as investors and end-users react to the apparent shortage of available industrial land. Due to this phenomena,and a low interest rate environment, industrial strata product has surfaced as a more viable option for developers and investors. The cost of land and cost of construction has made developers look for other alternatives to lease. Since 2006, total industrial land sale volume exceeded $2.7 billion, with an average annual investment volume of $270 million. 2007 was the strongest year with $388 million, and as of Q3 2015 total investment volume is approximately $286 million. Over the last 10 years, Surrey (32%), Richmond (10%), and Burnaby (10%) represent just over half the sales volumes.1Source: Conference Board of Canada
Market IndicatorsRelative to prior period Q1 2015 Q1 2016 Trend
VACANCY 3.6% 1.7%
YTD NET ABSORPTION (SF) 1,774,088 1,047,454
YTD NEW SUPPLY (SF) 1,107,954 164,800
UNDER CONSTRUCTION (SF) 1,251,510 4,160,345AVERAGE ASKING NET RENT* $8.03 $8.26 *Average Asking Net Rent is calculated using a weighted average
Market Trends and Forecast
Metro Vancouver Land Supply ReportThe recently released Metro Vancouver Inventory Report covered the current and future state of Metro Vancouver’s industrial market. Some salient points from this comprehensive report include the average annual net absorption of land in Metro Vancouver was approximately 938 acres over the period of 2010-2015 and that the “vacant’ industrial land supply might be substantially absorbed by the 2030s.
Q1 2016 Vacant Space by Property Size (SF)
Source: Metro Vancouver 2015 Industrial Lands Inventory, April 2016
-500,000
500,000
1,500,000
2,500,000
0.5%
1.5%
2.5%
3.5%
4.5%
New Supply (SF) Net Absorption (SF) Current Qtr Vacancy Rate
0
500,000
1,000,000
1,500,000
2,000,000De
lta
Rich
mon
d
Burn
aby
Vanc
ouve
r
Surr
ey
New
Wes
tmin
ster
Lang
ley
Coqu
itlam
Port
Coqu
itlam
Ridg
e-M
eado
ws
North
Van
couv
er
Abbo
tsfo
rd
Chilli
wac
k
Port
Moo
dy
Bulk/Logistic (>100,000) Large (30,000-100,000)
Mid (5,000-30,000) Small (0-5,000)
11 Research & Forecast Report | First Quarter 2016 | Metro Vancouver / Industrial | Colliers International
Metro Vancouver Market Overview
Market OverviewWith GDP growing at 3.9% in 2015, Metro Vancouver’s economy was ranked the top performing regional economy in Canada by the Conference Board of Canada. The manufacturing sector in Metro Vancouver has recorded consistent growth over the last few years, averaging an annual output of 3.4% from 2011-2015. With a depressed Canadian dollar and strengthening U.S. economy, foreign demand for Canadian goods will rocket exports to new heights, enabling the Vancouver manufacturing sector to achieve 4.7% projected growth in 2016.
With a lack of new supply in the first quarter of 2016, regional vacancy declined to an unprecedented low of 1.7%. Demand continues to surge in the industrial market, but as a result of a highly-constrained supply of developable industrial land and the rezoning of older industrial product towards light industrial or office uses, space is becoming more and more scarce and the disparity between supply and demand continues to grow. Relative to previous quarters, leasing activity continues to decline, with absorption falling from ~1.7 million square feet in Q1 2015 to ~1 million square feet in Q1 2016. That being said, with nearly 4.2 million square feet of new supply under construction over the next 24 months, the market should experience slight relief, offering up more opportunities for tenants and alleviating pressure on demand over the long-term.
Investment MarketThe industrial investment market remains strong, particularly as investors and end-users react to the apparent shortage of available industrial land. Due to this phenomena,and a low interest rate environment, industrial strata product has surfaced as a more viable option for developers and investors. The cost of land and cost of construction has made developers look for other alternatives to lease. Since 2006, total industrial land sale volume exceeded $2.7 billion, with an average annual investment volume of $270 million. 2007 was the strongest year with $388 million, and as of Q3 2015 total investment volume is approximately $286 million. Over the last 10 years, Surrey (32%), Richmond (10%), and Burnaby (10%) represent just over half the sales volumes.1Source: Conference Board of Canada
Market IndicatorsRelative to prior period Q1 2015 Q1 2016 Trend
VACANCY 3.6% 1.7%
YTD NET ABSORPTION (SF) 1,774,088 1,047,454
YTD NEW SUPPLY (SF) 1,107,954 164,800
UNDER CONSTRUCTION (SF) 1,251,510 4,160,345AVERAGE ASKING NET RENT* $8.03 $8.26 *Average Asking Net Rent is calculated using a weighted average
Market Trends and Forecast
Metro Vancouver Land Supply ReportThe recently released Metro Vancouver Inventory Report covered the current and future state of Metro Vancouver’s industrial market. Some salient points from this comprehensive report include the average annual net absorption of land in Metro Vancouver was approximately 938 acres over the period of 2010-2015 and that the “vacant’ industrial land supply might be substantially absorbed by the 2030s.
Q1 2016 Vacant Space by Property Size (SF)
Source: Metro Vancouver 2015 Industrial Lands Inventory, April 2016
-500,000
500,000
1,500,000
2,500,000
0.5%
1.5%
2.5%
3.5%
4.5%
New Supply (SF) Net Absorption (SF) Current Qtr Vacancy Rate
0
500,000
1,000,000
1,500,000
2,000,000
Delta
Rich
mon
d
Burn
aby
Vanc
ouve
r
Surr
ey
New
Wes
tmin
ster
Lang
ley
Coqu
itlam
Port
Coqu
itlam
Ridg
e-M
eado
ws
North
Van
couv
er
Abbo
tsfo
rd
Chilli
wac
k
Port
Moo
dy
Bulk/Logistic (>100,000) Large (30,000-100,000)
Mid (5,000-30,000) Small (0-5,000)
Stefan Morissette*Associate Vice President | IndustrialDirect: 604-692-1428Email: [email protected]
Sean BaganJunior AssociateDirect: 604-661-0821Email: [email protected]
www.collierscanada.com
INDUSTRIAL MARKET UPDATE | Q1 2016 | STEFAN MORISSETTE* | SEAN BAGAN
1388 Derwent Way,Delta, BC29,730 SF Freestanding Ware-house/Office facility on Annacis Island > 25’ clear ceiling height > 2 Dock and One Grade loading doors > 1,200 amp/600 volt, 3-phase
electrical service > Fully sprinklered > Extensive loading area > 2.33 acre site
530 Chester Road,Delta, BC19,294 SF Quality Warehouse/Of-fice with Dock Loading > 19,294 SF quality distribution facility,
strategically located on Annacis Island.
> 22’ clear ceiling height > Two (2) dock loading doors > Overhead gas fired unit heaters > Ample onsite parking and excellent
truck maneuvering areas
730 Eaton Way,Unit 10, Delta, BC4,772 SF of Office/Warehouse Space on Annacis Island > 20’ clear ceiling height > Two (2) grade level loading doors > 3-tonne overhead crane > Fully sprinklered > 600A/600V, 3-phase electrical
service > Up to eight (8) private offices and
one (1) boardroom
7553 Progress Way, Delta, BCLease of a 18,180 square foot ware-house/office facility in Tilbury, fea-turing high quality concrete tilt-up construction, 26’ ceiling height, two dock and one grade loading doors.
7337 North Fraser Way, Unit 106, Burnaby, BCPurchase of a 12,248 SF strata unit in Conwest newest develop-ment, located in South Burnaby on the southeast corner of North Fraser Way and Byrne Road.
8275 92nd Street,Unit 108/208, Delta, BCLease of 3,286 SF of first and second floor office/warehouse space in Buckingham Industrial Estates
11971, 11991 & 12011 Mitchell Road, Richmond, BCSublease of a 2.18 acre paved and fenced site with yard lighting and a 4,600 SF office/shop facility, located on Annacis Island.
For Sale/Lease
Lee G. Hester*Senior Vice President Office +1 604 998 6038Cell +1 604 671 [email protected]*Personal Real Estate Corporation
Buckingham Industrial Estates8275 & 8257 92nd Street, Delta, BC
OVER 60% LEASED
jll.ca
LEASED
LEASED
11200 Twigg Place,Richmond, BC4 Acre Site on Mitchell Island > Located in Mitchell West Industrial
Park > Fenced and leveled > Access to major traffic arteries > Two (2) points of access and
egress onto Twigg Place
LEASED
UNDER CONTRACT
TENANT REP
TENANT REP
TENANT REP
1587 Derwent Way, Unit A, Delta, BC15,318 SF Warehouse/Office Facil-ity with Dock and Grade Loading > Sublease of a 15,318 SF office and
warehouse facility on Annacis Island > 26’ clear ceiling height > Dock and grade level loading > Approximately 30 parking stalls.
SUBLEASED
7959 82nd Street, Delta, BC24,915 SF Premium Fresstanding Warehouse/Office Facility in Tilbury > High quality concrete tilt-up
construction on a 1.10 acre site > Three (3) dock level loading doors > Three (3) grade level loading doors > 26’ clear ceiling height > Fully sprinklered > Ample loading area
SOLD
SOLD
www.collierscanada.com
INDUSTRIAL MARKET UPDATE | Q1 2016 | STEFAN MORISSETTE* | SEAN BAGAN
11420 Horseshoe Way,Richmond, BCLease of a 5,530 SF Office/Ware-house Unit in Riverside Industrial Park, featuring 19.5’ ceiling height, one grade loading door and two gas forced heaters in warehouse area.
12180 Horseshoe Way,Unit 4, Richmond, BC3,040 SF Strata Warehouse/Office Unit > Concrete block construction > One (1) grade level loading door > 18’ clear ceiling height > Second floor office area with HVAC > Kitchenette > First and second floor washrooms
14488 Knox Way,Unit 148, Richmond, BC3,597 SF Warehouse with Dock and Grade Loading in North Richmond > Concrete tilt-up construction > 24’ ceiling height > One (1) dock and One (1) grade level
loading door > 100 amp, 120/280 volt, 3-phase
electrical service > 500 lb per SF floor load capacity > Fully sprinklered
11471 Blacksmith PlaceUnit 101, Richmond, BCCentrally located 3,462 SF Office/Warehouse Facility with Dock Load-ing in South Richmond > Attractive landscaping > Dock level loading with levellers > 16’ warehouse ceiling height > Proactive management > Ample parking and ample truck court
with room for up to 53’ trailers > Pylon signage available
13431 Maycrest Way, Units 110 & 140B, Richmond, BCDock Loading Facility in Crestwood Industrial Park > Unit 110: 3,500 SF warehouse/office > Unit 140B: 4,939 SF warehouse > Dock level loading > 19’ clear ceiling heights in warehouse > 500 lb. per square foot floor loading
capacity > Fully sprinklered and 3-phase power > Ample parking
23006 Hamilton Road, Richmond, BCLease of a 22,651 square foor parcel situated on the corner of Fraserwood Road and Dyke Road, within close proximity to Highways 91 and 91A.
LEASED
LEASED
SOLD
6260 Graybar Road,Unit 165/170, Richmond, BC5,200 SF Warehouse/Office Unit with Dock and Grade Loading > 20’ ceiling height > Two (2) dock and One (1) grade level
loading bays > Fully sprinklered > Gas fire forced air heaters in
warehouse > Three phase power > New improved offices
SUBLEASED
6660 Graybar Road,Unit 100, Richmond, BCFor Sale by Court Order - Industrial Strata Unit in East Richmond > 5,000 SF (approx.) over two levels > Prime corner commercial strata unit
with second floor office space > Grade level dock in the rear of the
building > Easily accessible from many major
routes > Ample surface parking
UNDER CONTRACT
3511-3571 Viking Way,Unit 5/6, Richmond, BC7,200 SF Office/Warehouse at Knightsbridge Business Centre > One dock level loading door per bay > Ideal for small to medium
