Forget that multi-million-dollar condo on Vancouver’s waterfront. Invest in a warehouse instead.
The Canadian city is the world’s hottest industrial real estate market with lease rates up 29 percent in the first quarter year-on-year versus a global average of 3 percent. IKEA and BMW are among companies that have snapped up the biggest industrial and logistics spaces, according to data provided by CBRE Group.
“Industrial previously was almost like a forgotten asset class,” Jason Kiselbach, vice president and sales manager at CBRE Vancouver, said by phone. “But we haven’t even scratched the surface of the demand that’s going to continue to grow and put more pressure on the industrial market.”
E-commerce giants such as Amazon are driving the need for more logistics and storage space in urban centers. Consumers demanding quick online deliveries are forcing companies to carry more inventory in the city where the last-mile deliveries take place. Those dynamics are playing out across Canada and the U.S.
“The big household retail names — you don’t realize that everything that they provide you has to come through a warehouse,” said Kiselbach. “The new retail is really warehouse direct sales.”