{"id":11900,"date":"2019-03-21T10:10:11","date_gmt":"2019-03-21T17:10:11","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=11900"},"modified":"2019-03-13T08:45:49","modified_gmt":"2019-03-13T15:45:49","slug":"industrial-rising-costs-retail-slump-could-sector-posting-canadas-highest-lease-rates-sale-prices","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/03\/industrial-rising-costs-retail-slump-could-sector-posting-canadas-highest-lease-rates-sale-prices\/","title":{"rendered":"Industrial Rising Costs, Retail Slump Could Sector Posting Canada&#8217;s Highest Lease Rates &#038; Sale Prices"},"content":{"rendered":"<p style=\"text-align: justify;\">Metro Vancouver industrial lease rates are now the highest in Canada, and vacancy rates have fallen in the face of unprecedented demand, but clouds are forming over the region\u2019s strongest real estate sector.<\/p>\n<p style=\"text-align: justify;\">As of the end of December, industrial lease rates averaged $11.86 per square foot, the highest in the country, according to commercial agency CBRE Canada.<\/p>\n<p style=\"text-align: justify;\">Lee &amp; Associates reports that annual lease rates have spiked to $17.70 per square foot in the city of Vancouver, where the industrial vacancy rate has dropped to 1.4%, by far the lowest of any Canadian city.<\/p>\n<p style=\"text-align: justify;\">Metro Vancouver sales of industrial properties hit $385 million in 2018\u2019s last three months, considered a fourth-quarter record. The price per square foot is now an unprecedented $370, up $80 per square foot from a year earlier.<\/p>\n<p style=\"text-align: justify;\">There is nearly five million square feet of new industrial space under construction across the Metro region, but about 60% of it is pre-leased or sold, according to CBRE.<\/p>\n<p style=\"text-align: justify;\">Much of the industrial action, CBRE noted, is in warehouse and distribution space tied to the retail sector, including the 1.1-million-square-foot Xchange business park in Abbotsford by Hungerford Group and QuadReal Property, developed on speculation and proposed for completion late next year.<\/p>\n<p style=\"text-align: justify;\">But a \u201cmajor deceleration of retail sales growth\u201d from 9% in 2017 to 2% last year is among the reasons the BC Real Estate Association cites for an expected \u201cflattening\u201d of commercial and industrial markets in 2019.<\/p>\n<p style=\"text-align: justify;\">Accelerating input costs could be the biggest threat to the speculative industrial development, however.<\/p>\n<p style=\"text-align: justify;\">Cushman &amp; Wakefield estimates industrial construction costs have risen 40% over the past two years.<\/p>\n<p style=\"text-align: justify;\">U.K.-based international project management and consulting firm Turner &amp; Townsend warns that work on major B.C. projects, like LNG Canada at Kitimat, the largest construction project in Canada, and BC Hydro\u2019s Site C dam, will worsen an existing labour shortage, \u201cadding to the cost pressure.\u201d<\/p>\n<p style=\"text-align: justify;\">\u201cThis is further exacerbated by the [BC] premier\u2019s proposal to implement Community Benefits Agreements, which will require labour on key infrastructure projects to be unionized and managed through a Crown corporation,\u201d noted Turner &amp; Townsend in its 2019 Canadian Market Intelligence Report, released February 28.<\/p>\n<p style=\"text-align: justify;\">The report cautions that rising construction costs could \u201cinfluence the commencement of the large number of projects in the commercial real estate pipeline\u201d in the Lower Mainland.<\/p>\n<p style=\"text-align: justify;\">Industrial real estate specialists, however, remain confident the market will bull through the headwinds, led by foreign investors attracted by high lease rates.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2019\/03\/metros-high-flying-industrial-real-estate-faces-turbulence\" target=\"_blank\" rel=\"noopener noreferrer\">Metro&#8217;s High-Flying Industrial Real Estate Faces Turbulence<\/a> by Frank O&#8217;Brien | Business in Vancouver<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Metro Vancouver industrial lease rates are now the highest in Canada, and vacancy rates have fallen in the face of unprecedented demand, but clouds are forming over the region\u2019s strongest &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/03\/industrial-rising-costs-retail-slump-could-sector-posting-canadas-highest-lease-rates-sale-prices\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-11900","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Industrial Rising Costs, Retail Slump Could Sector Posting Canada&#039;s Highest Lease Rates &amp; Sale Prices &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/03\/industrial-rising-costs-retail-slump-could-sector-posting-canadas-highest-lease-rates-sale-prices\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Industrial Rising Costs, Retail Slump Could Sector Posting Canada&#039;s Highest Lease Rates &amp; 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