Real estate investors reeling from the recent plunge in Metro Vancouver’s condominium sales may be wise to consider industrial strata, according to investment advisers.
“When you can sell four concrete walls and a totally empty space for $600 per square foot, it can make residential condos appear much more complicated,” real estate consultant Ozzie Jurock pointed out in his recent Insider newsletter. Industrial investors, he added, are also exempt from B.C.’s Residential Tenancy Act regulations and the 15% foreign buyer tax on Metro Vancouver residential real estate.
The average price of industrial space this year in East Vancouver hit $596.50 per square foot, according to a survey from Avison Young, which noted the average price for industrial property in the city has soared 50% from 2015.
This compares with Vancouver condo apartment prices, which have increased about 30% from a year ago.
Metro Vancouver’s industrial vacancy is 1.5%, the lowest in Canada, and compares with Calgary (6.6%), Edmonton (6.3%) and Toronto (3.3%).
It’s also not much higher than Vancouver’s residential vacancy rate.
PC Urban, which is developing light industrial buildings in Vancouver, mostly for the high-tech industry, presold 167,000 square feet of new industrial strata space before it even started construction on its Marine Drive site.
Vancouver industrial building per-square-foot prices now range from $189 to $824, with industrial land in the city selling for an average of $386, studies show. Because Metro Vancouver industrial rents are the lowest in Western Canada, industrial rents could be poised for an increase.
The average for existing inventory is $8.01 per square foot, annually, compared to $10.25 in Calgary and more than $10 per square foot in Edmonton and Regina, reports Colliers International.
