Industrial real estate sales in Delta set new dollar volume records in 2018 as extremely strong demand continued to fuel the market, according to the latest report by industrial real estate firm Avison Young.
Strata units were particularly a hot commodity, a trend which has also largely carried through the first nine months of 2019.
With 53 deals valued at $396.6 million, Delta industrial sales last year surpassed all previous records.
The highlights include the $151.2 million sale of the South Fraser Distribution Centre, which was the largest industrial deal in B.C. in 2018, and the $48.3 million disposition of 480 Audley Blvd., which was purchased by the Vancouver Fraser Port Authority.
Also contributing to the record dollar volume were 15 strata sales in the first two phases of Delta Link Business Centre that were valued at more than $59.8 million.
The $42.5 million sale of Delta Building Products Ltd.'s building also contributed significantly to total volume.
The firm notes that while a lack of new supply, combined with record-low industrial vacancy, have limited the number of lease transactions, especially for new entrants, sales activity has remained strong.
“Investors will continue to find it increasingly difficult to buy properties in Richmond or Delta compared with other select Metro Vancouver markets where there is still room to grow rental rates and new construction is providing acquisition opportunities. Vacancy is expected to remain at or near record lows for the next 12 to 24 months as strata development remains a substantial component of the new supply being delivered,” the report concludes.
A recent report for Metro Vancouver’s Industrial Lands Strategy Task Force, chaired by Delta Mayor George Harvie, notes that as part of the development of the Regional Industrial Lands Strategy, the regional district retained a consultant to investigate the changing nature of industrial land demand.
“There is a severe shortage of available industrial land, and demand is strong. The consultant found that the identified ‘vacant ‘ inventory will be taken up in 22 to 28 years, assuming 100 per cent of the undeveloped inventory is available for industrial development in this time frame,” the report notes.
The report listed several potential recommended actions, including increasing the inventory of industrial land, particularly for large site users.
“This will clearly be a challenging policy direction as there are no uncontroversial ways to shift land from other uses to industrial. However, if the region wants to maintain the full dimensions of its economic and employment diversity, it is necessary to confront the challenge of being able to accommodate large manufacturing and logistics users,” the report explains.
