DTZ Barnicke Q4 2010 Industrial Report (HQ)

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  • 8/7/2019 DTZ Barnicke Q4 2010 Industrial Report (HQ)

    1/4

    Metro VancouveIndustrial Repor

    Fourth Quarter 201

    www.dtzvancouver.com

  • 8/7/2019 DTZ Barnicke Q4 2010 Industrial Report (HQ)

    2/4Metro Vancouver Industrial Report - Fourth Quarter 2010 02

    Metro Vancouver Industrial ReportFourth Quarter 2010

    Signifcant industrial leases o Q3 2010

    Address Municipality Size (sq t) Tenant

    927 Derwent Way Delta 155,000 Euro-Asia Transload

    3023 188th Street Surrey 132,000 Cold Logic Pty Ltd.

    7530 Hopcott Road Delta 116,570 Northgate Terminals Ltd.

    917 Cliveden Avenue Delta 115,646 Merlin Plastic Supply Inc.

    16131 Blundell Road Richmond 111,000 Kuehne & Nagel Ltd.

    Economic Summary

    Despite a steady, i slightly rocky 3rd quarter, Canadas economy

    has recovered to pre-2008 levels as investors have regained con-dence, a trend that is evidenced in the increase in constructioninvestment and increases in permit applications. Non-residential

    permit were up 26.7% in September, ollowing a 24.2% decline inAugust. Total new construction investment was up to $10.55 bil-lion, up rom $10.02 billion last year (a 5.3% increase) and up 2%

    rom last quarters $10.34 billion.

    Employment ollowed similar trends with a drop to the end o thequarter, but regaining its ooting into the 4th quarter. Due to the

    start o quarter downturn, Canada only averaged about 5700new jobs and most o these were regained in October and No-vember. This is down rom the average o 51000 in the rst hal

    o 2010. Unemployment held steady, but is still up 2.2% rom thistime last year. Construction employment ell 27,000 in December,

    but is still up 4.8% rom last year, and with new investment intoconstruction, employment prospects look good.

    Metro Vancouver Market Summary

    The Metro Vancouver Industrial Market had a steady quarter, withsales up signicatly, and vacancy down. Industrial sales con-

    tinued their recovery, up to a total o $171,000,000 this quarter,a large increase rom last quarters $135,000,000, but still shy

    o last years $194,000,000. Vacant space across the area ellto 7,834,656 square eet (4.26%) down 46 basis points rom last

    quarters 4.72%. Strata and small box spaces continued to drivethe market.

    Despite the drop in vacancy, the large increases in supply overthe last ew quarters have ensured that prospecting tenants have

    many options. This has had a lowering eect on rental rates,to the point where in some areas the rates have reached 2006levels.

    Larger box spaces continued to have issues moving, many o

    which have been sitting on the market or up to and over a year.Small to mid range (2000 - 20000 square eet) product continues

    to drive the Metro Vancouver Market.

    Vancouver North Vancouver Burnaby

    The City o Vancouver saw a busy quarter. Vacancy rates de-

    creased considerably, down 109 basis points rom last quarterto 2.79%. Vacancy dropped airly sharply in Vancouver rom

    3.88% to 2.79%. Once again, much like the rest o the GVRD,North Vancouver had a airly busy quarter, with the vacancyrate dropping a ull 243 basis points to 1.47%. The new supply

    at the Dollarton Business Park sold quickly, and in North Van-couvers historically static market this is not surprising. Brand

    Municipal Vacancy Rates

    Source: DTZ B

    Source: DTZ Barn

    Source: DTZ Barnicke

    Historic Vacancy and New Supply

    4.26%3.65%

    3.15%

    9.12%

    7.29%

    1.47%

    3.72%

    1.47%

    2.28%

    3.29%

    4.04%

    2.79%

    Overall

    Burnaby

    Coquitlam

    Delta

    Lan

    gley

    MapleRidge

    NewWestminster

    NorthVancouver

    Por

    tCoquitlam

    Richmond

    Sur

    rey

    Van

    couver

    Increase in va

    Decrease in va

    0.0

    1.0

    2.0

    3.0

    4.0

    5.0

    6.0

    7.0

    2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010YTD

    (MillionsofSqFt)

    New supply

    Vacancy rates

  • 8/7/2019 DTZ Barnicke Q4 2010 Industrial Report (HQ)

    3/4Metro Vancouver Industrial Report - Fourth Quarter 2010 03

    Metro Vancouver Industrial ReportFourth Quarter 2010

    Metro Vancouver industrial statistics Q4 2010

    Region Total inventory (sq t) Total vacant (sq t) Vacancy rate Average asking lease raPSF* (NN

    Abbotsford 5,033,248 127,159 2.53% $6.

    Burnaby 27,259,152 995,915 3.65% $8.

    Coquitlam 8,564,142 269,960 3.15% $8.

    Delta 21,698,012 1,979,186 9.12% $7.

    Langley 15,508,095 1,130,175 7.29% $7.

    Maple Ridge/Pitt Meadows 2,087,572 30,689 1.47% $8.

    New Westminster 3,923,000 145,985 3.72% $6.

    N. Vancouver 4,770,387 70,046 1.47% $13.

    Port Coquitlam 8,521,663 194,523 2.28% $8.

    Richmond 34,229,972 1,127,080 3.29% $8.

    Surrey 28,891,515 1,168,021 4.04% $8.

    Vancouver 23,558,246 657,258 2.79% $10.

    Total 184,045,004 7,895,997 4.27%

    Source: DTZ Barnic

    new industrial space in North Vancouver is a rare occurrence.

    However, the lack o possibilities or new supply has and willcontinue to have a infating eect on rental rates. For average

    industrial space, more than 2/3rds o available spaces in NorthVancouver is over $10 per square oot. Like the rest o theGreater Vancouver area, owners are having a hard time leasing

    out larger spaces, however due to their rarity in North Vancou-ver, the rental rates are still high and going up. While there has

    been new construction, it does not seem to be enough to keepup with demand. Most o the new supply is coming to the

    market ully leased or sold. Q4 saw about $12,118,410 in sales,up rom $4,702,000 rom last quarter. This is largely due to thesale o the strata units in the new Dollarton Business Park.

    Burnaby had a busy quarter in terms o supply. It was one

    o the ew areas in the Greater Vancouver Area that had anincrease in vacancy, i only slightly, up 30 basis points rom lastquarter to rest at 3.65%. This is due to the act that Burnaby

    was home to the largest number o completed projects thisquarter. New supply at the North Fraser Corporate Centre,

    Burnaby Business Park and Glenwood ensured that the cityo Burnaby kept just one step ahead o the demand. This new

    supply has also had a dampening eect on rental rates, bring-ing them down to rates last seen in 2006.

    Northeast Sector Ridge Meadows

    Much like the rest o the Greater Vancouver area, the Tri-Cities

    saw a airly steep drop in vacancy rates. This was largely dueto 91-93 Glacier Street being taken o the market when it wasleased to Uni-Select Pacic.

    The Ridge Meadows area saw very little activity in the 4thQuarter. Vacancy dropped o slightly as 17,000 square eet

    was taken o the market

    Richmond Delta

    Richmond saw a strong sales activity this quarter ueled by de-

    mand or small bay spaces (2,000-10,000 square eet). Despia large volume o new supply, prices and lease rates have continued to rise in the area.

    Total vacancy in Richmond increased by 47 basis points to reac

    3.79%. Delta has also seen an increase in vacancy by 147basis points to 9.29%. Both cities have seen a large amount o

    new supply (over 300,000 square eet this quarter), which hascontributed to these rates. Following the regional trend, largspaces have had trouble attracting interest. This has particula

    aected this submarket due to the number o larger bay proper-ties that came on the market this quarter (20,000 to 100,000

    square eet).

    Surrey Langley Abbotsford

    The Fraser Valley saw slow activity, and some new supply in the

    4th quarter. Small to mid size spaces drove much o the mar-kets activity. Due to continued oversupply, the Valley once ag

    saw an slight increase in vacancy, up 13 basis points rom 4.69%to 4.82%.

    Abbotsord saw a slight decrease in vacancy, dropping 13 basispoints rom 2.66% to 2.53%. This occured despite the nearly

    100,000 square eet o new supply that came with the comple-

    tion o the Maclure Business Park, and the 40,000 square eetat the Queen Street Business Park. Langley also saw a slight dip

    in vacancy, alling 16 basis points to sit at 7.29%. Surrey waone o the ew locations to see an increase in vacancy, but this

    was due, in large part, to 190,000 square eet that came on themarket at 1125 124th Street.

  • 8/7/2019 DTZ Barnicke Q4 2010 Industrial Report (HQ)

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    Metro VancouveIndustrial Repor

    Fourth Quarter 201

    Top industrial land sales o Q4 2010**

    Address Municipality Size (acres) Price Price/Acre Profle Purchaser

    12100 Hartnell Road Richmond 21.3 $21,000,000 $985,915 Government City of Richmond22650 Fraser Highway Langley 7.5 $6,152,559 $860,112 Investor Tall Crane Equipment LtdLot 3 Townline Road Abbotsford 12.69 $4,902,000 $386,167 Government City of Abbotsford

    9712 190th Street Surrey 2.33 $3,150,000 $1,354,839 Investor Two Pillars Holdings

    Top industrial sales o Q4 2010**

    Address Municipality Size (sq t) Price Price/sq t Profle Purchaser

    1700 No. 6 Road Richmond 205,170 $14,700,000 $72 Investor Hungerford Group

    70 Golden Drive Coquitlam 52,000 $8,500,000 $163 User Smithrite Disposal ltd.

    12280 Trites Road Richmond 70,417 $7,775,000 $110 Developer Southstreet Development

    Unit 4&5 7978 North Fraser Way Burnaby 37,101 $5,204,500 $140 Investor 08889862 B.C. Ltd.201-217 West 6th Avenue Vancouver 19,540 $4,580,000 $234 Investor Red Spruce InvestmentsUnit 1, 7978 North Fraser Way Burnaby 29,039 $4,319,084 $149 Investor Wyatt H