Industrial space in Burnaby is becoming harder and harder to find, according to real estate service provider Avison Young.
Burnaby’s popularity, like much of the region, is making it difficult for those who want to buy industrial properties rather than lease space in them, according to Kyle Blyth, Avison Young’s Burnaby industrial specialist.
Burnaby’s industrial real estate market is strong, according to Blyth, with less and less space available for building new industrial properties.
“The issue is, the majority of the tenants in Burnaby want to stay in Burnaby because it is such a centralized location,” he said, adding. “There’s not a lot of supply in the Burnaby marketplace.”
Companies looking to buy rather than lease often find demand outpacing buying opportunities, Blyth explained.
“Let’s say there’s a 20,000-square-foot user that’s looking for industrial space in North Burnaby or South Burnaby,” he said. “There aren’t a lot of options.”
There are shortages of space across a range of industrial sectors, including light manufacturing, distribution and warehousing, and logistics, Blyth said.
“A few people are looking for heavy industrial,” he said, adding that requires three-to-five acre properties. “And that’s difficult to find.”
Many businesses find they have to lease when the properties just aren’t available to purchase, Blyth said.
“There’s a demand for new space, there’s a demand to own and occupy their own facility,” he added. “It’s just a matter of trying to find those one or two buildings that might be available on a purchase basis.”
Leasing opportunities are more plentiful, with the average Burnaby industrial rental rate at $9.17 per square foot, because those who do own and develop available land want to hold onto it, according to Blyth.
“It’s tough to replace an asset once you (sell) it,” he said.
The buildings that are available tend to be older, he added.
“You’re seeing older, more tired buildings that are vacant,” he said. “A lot of users in that 20,000 square foot range are looking for a more modern facility, but unfortunately they’re going to have to look elsewhere.”
There isn’t much surplus industrial land left in Burnaby, he said.
“There are a few larger pockets that are currently owned by developers that are in the early development stages, but demand is quite strong,” he added.
Burnaby has 27.64 million square feet of industrial space, according to Avison Young, with a 4.5 per cent vacancy rate.
Overall, in Metro Vancouver there is 190.95 million square feet of industrial space, with a four per cent vacancy rate.
