Market Commentary
Real Estate Market Industrial Overview, First Quarter 2012
June 18, 2012 | Posted by: Francine Tracey
Source: Colliers International
Highlights:
Canada and the US are both experiencing GDP growth over 2011 and 2012 at a rate over 2.5%
The Bank of Canada’s most recent Business Outlook survey indicated that the majority of companies plan to invest in machinery, equipment and/or additional employees this year.
Consumer spending is expecting to continue to grow at the same pace as 2011.
Vacancy rates in the GVRD are generally starting to drop
Vancouver dropped to 3.1% from 4.0 % in the first quarter of 2012. Investor and owner/user interest in existing buildings and sites between two and five acres is exceptionally high. Freehold land continues to become increasingly scarce.
Delta and Richmond markets dropped from 8.8% and 3.8% vacancy to 7.6% and 3.6% with Richmond industrial market showing 92,064 of positive net absorption in 2012.
Coquitlam experience high vacancy rates in 2010/11 due to bridge and road construction but has dropped from 9.0 % to 8.2 % in the first quarter of 2012. It is anticipated that vacancy in Coquitlam will drop over the course of 2012 and in turn lease rates will hold firm or start to rise.
Burnaby and Vancouver showed moderate leasing activity, however demand for quality investment product remains strong in the absence of available supply. Both vacancy and rental rates are expected to remain reasonably flat in Burnaby/ Vancouver as a number of large projects are set to compete in 2012 including strata industrial/warehouse parks in the south Burnaby area. Nevertheless Burnaby Vacancy rate currently stands at 2.4% and Vancouver at 3.1%.
The Fraser Valley market remained strong throughout the first quarter of 2012 with vacancy rates dropping to 2.3% in the first quarter of 2012. Langley also declined to 3.8%.