VANCOUVER - In its Industrial Real Estate Market Report published today, Newmark Knight Frank Devencore reported that the industrial real estate market in the Metro Vancouver area performed strongly in 2011, and at the end of the year overall vacancy rates were in the 4% range. There are substantial regional differences in vacancy rates, however. Opportunities for tenants are perhaps most plentiful in Delta, where vacancy rates are running between 7%-9%, as well Langley vacancy rates are in the 4.5%-7.5% range. Space availability is tighter in Burnaby, Surrey, and Vancouver itself.
"We don't anticipate any major shifts in either vacancy rates or average asking net rents over the first half of 2012 as a degree of economic uncertainty will continue to temper growth," said Graeme Bullis, Senior Advisor of Devencore Company Limited. "There are small pockets of speculative development and strata warehouse construction taking place, but demand for strata space is so high that it is leased before construction is complete. In general, we anticipate seeing more 100,000-200,000 square-foot buildings being built, in which 10,000-20,000 square-foot-units will be available for sale."
Newmark Knight Frank Devencore also reported that overall availability rates in the industrial market declined in most of the country's major cities, and is approaching the 6% range that was reached prior to the 2008-2009 recession. Activity was strong in the oil and gas sector in the west, and western cities, including Calgary, Winnipeg and Edmonton continued to register the lowest industrial vacancy rates in the country. The warehousing, distribution and manufacturing sectors in Toronto and Montreal also performed reasonably well, despite the continuing strength of the Canadian dollar in relation to its U.S. counterpart.
With vacancy rates slowly dropping, the Metro Vancouver market may begin to tighten up towards the end of 2012," Mr. Bullis added. "As a consequence, tenants and their real estate advisors should be looking at strategies to undertake leasing, restructuring or blend and extend transactions as soon as possible, and considering the relative benefits of longer-term commitments."
About Newmark Knight Frank Devencore
Devencore is the Canadian partner of Newmark Knight Frank, one of the largest independent real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution.
Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 240 offices in established and emerging property markets on six continents. With a combined staff of 7,000 and revenues last year exceeding $993 million, this major force in real estate is meeting the local and global needs of owners, tenants, investors and developers worldwide.
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