Industrial real estate in Vancouver expanded at the fastest rate in the country in 2015, according to a Cushman & Wakefield report released April 18.

A total of 4.5 million square feet of industrial space was absorbed in the city last year, which was the biggest increase in 15 years.

One of the biggest factors in this growth was the increase of e-commerce transactions, according to the report.

“Growth in Vancouver and Toronto has been stimulated by a rapidly evolving e-commerce sector and related warehouse and distribution demand, along with strengthening export and manufacturing sales,” the real estate company said in its report.

“E-commerce is driving demand for larger warehouse and distribution facilities—especially in Canadian markets adjacent to populated U.S. centres—that are well located and automated to support streamlined logistics, including just-in-time delivery to store locations and individual customers.”

Vancouver and Toronto in particular will see industrial real estate growing even more in the near term, Cushman forecasts.

“Vancouver and Toronto have seen a significant drop in vacancy over the past two years, and this will exert upward pressure on rental rates for top-grade product in key markets,” the report said.

Growth has by no means been restricted to those two cities.

“Industrial real estate has hit a new high,” said Cushman & Wakefield national director of research Stuart Barron.

“You have to look before the financial crisis to see the kind of robust growth happening now across major Canadian markets.”

A low Canadian dollar, low interest rates, increasing demand from the United States and the low energy prices have all contributed to increases in the sector.

Barron said one surprising finding in the report was that Calgary did not see a drop in industrial real estate absorption in 2014 or 2015.

“That’s remarkable considering the magnitude of the energy bust on the downtown office market [in Calgary] and speaks to the dynamics and resilience of industrial real estate.”

Cushman & Wakefield : Vancouver Industrial Real Estate Hit 15-Year High in 2015 by Emma Crawford Hampel | Business in Vancouver