April 2020 - Vancouver Industrial Real Estate Market Update in one word “Balance”.
Vancouver Industrial Real Estate Market Update in one word “Balance”.
The GVRD industrial warehouse market for the next quarter looks to be balanced by both short term and long-term demand and supply constraints.
- Industrial properties are tied to many essential services leaving a bright outlook for the industrial warehouse market.
- Construction in Vancouver of new industrial warehouses is slowing as there are less trades people available to work due to some staying at home, in addition BC may follow suite of Ontario’s shut down of all non-essential industrial construction.
- Companies are needing to adapt quickly to more of an online business model as people are social distancing and ordering products online.
- Short term leases are on the rise as companies look for extra space to store overflow product. This is balanced by non-essential businesses are starting to sublease extra warehouse space available.
- Availability for industrial warehouse is still tight from the previous quarter.
- COVID-19 has caused an abrupt slowdown in the industrial activity in the Greater Vancouver Area.
- Industrial warehouse tenants in Vancouver are submitting notices to their landlords requesting extensions for paying rent.
- Buyers and tenants looking for new industrial property have hit the pause button for the most part and are now in the “wait and see” category.
- Prior to the pandemic lease rates were on a steady rise in 2019, and in 2020 they were starting to slow in growth, post COVID-19 lease rates are now stabilizing
- China’s initial supply chain shutdown has caused disruptions.
- The economy is expected to slow due to people losing net wealth in their stock portfolios combined with the loss of jobs. Consumer spending is slowing.