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With the strongest industrial commercial real estate (CRE) market in Western Canada, Victoria stands out from all the other capitals in the Western provinces. They boost the lowest vacancy, not only in all of Canada, but in North America.
Victoria also appears to be prime for industrial strata speculation, as they also have the highest industrial lease rates in Canada. With low vacancy and high lease rates there is a reason to at least take notes on what they are doing right, regardless of what investment type you prefer.
Owner Occupiers Outnumber CRE Investors in the British Columbia Capital
According to Colliers, Victoria’s industrial lease rates are up by 15% increase over last year, averaging $15 per square foot. This compared to Metro Vancouver at $13.12 per square foot or even Greater Toronto at $12 per square foot, it is no surprise that investors are eyeing the British Columbia capital city industrial property market.
According to local realtors, mainly owner-occupiers occupy the 9.3 million square feet of industrial space. This could all change in 2021, with more owners realizing that now could be a good time to lease or sell to serious investors. For now, Victoria is leading the Western Canadian capitals and enjoy a very low industrial CRE vacancy of just 0.7%!
Industrial Strata Properties to Become a Trend in Greater Victoria
Low vacancy rates in Victoria and the fact that property owners occupy most of the CRE units call for new developments. But therein lies the problem, as the land cost continues to rise dramatically.
That’s why many investors are looking into industrial strata opportunities.
One such notable project is an industrial stratum of 13 units in Langford. With $315-$350 lease rates per square foot, the project sold last year, having around 30% of investor buyers.
Another example is a $100 million project in Colwood, which leases 358,000 square feet of space.
The State of Industrial CRE in Other Western Canadian Capitals
Regina, Saskatchewan, has quite a strong industrial CRE market and the current vacancy rate of 5.24% and average industrial lease rates of $10 per square foot.
With lease rates of $9.67 per square foot, Edmonton isn’t far behind, but its vacancy rates are higher 7.8%. Their vacancy continues to rise with the pandemic’s impact, as more businesses are downsizing or shuttering permanently.
Winnipeg has average lease rates of $7.64 per square foot and a vacancy rate of 4.2%. The Manitoba capital has a high demand for industrial CRE properties, so the sector will likely keep booming.
Western Canada’s industrial CRE market offers excellent investment opportunities. They are particularly attractive in Victoria, where the lease rates are highest and vacancy rates are the lowest. As the city continues to boast the highest average lease rates, the owner-occupied market could soon become investor-driven. We are bound to see industrial strata lease opportunities taking off in the near future.