Already 37 million dollars in transactions have taken place this year, but apparently this is not enough to meet the demand. The Avison Young Summer/Fall Vancouver Industrial Report states that the transaction numbers are at the highest point they’ve been in the last three years.
Economic improvements and lower debts have meant that buyers are seeking out new purchases for development. Business space is increasingly in demand as the cost of borrowing or acquiring capital continues to be very low.
The cost of borrowing has declined dramatically over the last decade and a half and businesses are taking advantage of this.
Unfortunately there is a lack of larger spaces available. Most of the activity has been in the smaller scale investments. Most of the deals, in fact over three quarters of them, were under two million.
According Vancouver realtors, Vancouver’s industrial market has seen twenty-seven transactions valued over and above 36.8 million this year.
While the vacancies did rise during the Spring of 2011, sitting at 3.9 percent (above the 3.5 percent of 2010), this is expected to decline by the end of the year. A constraint in land supply and a lack of new development are expected to reduce these figures.
Suburban lower-cost markets may see more activity in order to fill the demand. If more land does not become available in the metro Vancouver area than some companies may have to head outwards beyond the central area.
Leasing land deals have remained steady throughout the year however. With larger spaces available, there is less constraint than in the buyers market.