It seems like the pandemic that started last year only increased an already high need for warehousing in our region. According to Statistics Canada, online sales increased 110.7% from January 2020 to January 2021 and reached $3.5 billion; there is an increasing demand for space to store inventory, process orders, and organize deliveries.
Surrey’s city council recently approved the change of the purpose of a farmland extension to turn it into industrial real estate, responding to a near-zero vacancy rate of industrial warehousing in the city. Metro Vancouver’s vacancy rate at 0.5% is the second-lowest in North America; it’s a need that presents opportunities for developers focusing on warehousing projects.
The demand for warehousing space is not only about the surface but also about its quality and possibilities. Nowadays, facilities must be ready for different needs such as refrigeration units, safety equipment, accessibility for forklifts of various sizes, recycling, green processes, and more.
Location, which is usually solely related to proximity to airports, harbors, and main highways, must now consider the increasing price of real estate. A half-an-acre piece of land with industrial potential in North Vancouver was sold last August for $7 million, while 0.8 acres of industrial land in Surrey were sold for $3.6 million.
For those investors bold enough to enter the warehousing market, there are a few ways to invest. The boldest one would be assuming the risk and investing directly in new warehouses developments, suitable for today’s needs to attract more companies.
Investors who already own retail spaces, those feeling the impact of retailers going out of business, could flip them into warehouse spaces with low investments. Ultimately, those wanting to take advantage of the opportunity, but at a lower risk, could invest in trusts already investing in warehousing.
The need for warehousing space is real and is urgent; cities must create new areas for industrial development to keep the companies and the jobs they bring. It is an exciting real estate investment opportunity; it’s not exempt from risks, but it will be worth it for those entering soon.