Was the Vancouver Warehousing Market Affected by the Rising Interest Rates?

Even though interest rates are rising, the Vancouver warehouse market remains red-hot and unaffected. When the Bank of Canada announced they were increasing the interest rate rise to 3.75% in October 2022, many analysts were expecting vacancy rates to rise and properties to stay on the market for a longer period.

Instead, the market has continued to thrive with record-low vacancy rates and properties selling within days or weeks of being listed. A recent Q3 2022 CBRE report on industrial real estate in Greater Vancouver found the following:

1. "Availability rates dropped 20 bps to a new low of 0.8%, driven by extreme supply shortages above 100,000 sq. ft. despite record construction levels across all submarkets."
2. "Average asking lease rates across all of Metro Vancouver rose above the $20.00 benchmark to $20.67 per sq. ft., a $1.74 increase since Q2 2022."
3. "The Vancouver market reported availability rates at or near their respective 10-year lows, recording availabilities for less than 1%."

So, what is driving this demand?

There are a few key factors:

• E-commerce and the continued growth of online shopping.
• The low Canadian dollar makes Vancouver real estate an attractive investment for foreign buyers.
• Vancouver's proximity to the US border and the Port of Vancouver.

As you can see, Vancouver is a strategic location for businesses and investors, and the rising interest rates have not deterred them. If anything, the demand for Vancouver warehouse space has only increased.

If you are thinking of investing in Vancouver industrial real estate, now is a good time to do so. With vacancy rates at record lows and prices continuing to rise, you can expect to see a good return on your investment.

Contact the CIREA today to start your search for industrial warehouses in Vancouver. Our team works with qualified warehouse owners in Vancouver and across Canada. We can help you find a warehouse.

The Canadian Industrial Real Estate Affiliation (CIREA) is an affiliation containing accredited warehouse owners in key Canadian cities such as Vancouver, Toronto, and Montreal. Our affiliation connects warehouse owners looking to sell or lease their property, with businesses in need of Canadian warehousing space.

Sources:

https://www.cbre.com/insights/figures/vancouver-industrial-figures-q3-2022

https://www.globest.com/2022/10/11/canadas-industrial-markets-get-tighter/?slreturn=20221016200118