The Vancouver Sun
There has been healthy debate over the past four years about the residential real estate market. In comparison, very little has been written about the industrial market. This is unfortunate, as a healthy industrial real estate market delivers benefits to all of us who live and work in B.C.
Our company, Beedie Development, has extensive experience in industrial construction, development and property management. Without question, the current industrial market in B.C. is the strongest we have experienced in our 63-year history. There are many factors which have contributed to this strength, but unequivocally, the policies of the B.C. Liberal government (such as a competitive tax structure, balanced budgets and investments in transportation infrastructure) have played a pivotal role.
Prior to the last provincial election, I wrote an editorial on the role that confidence in the government plays in investment decisions and the resulting positive benefits to our economy. The last four years reinforces this argument.
Demand for industrial space in B.C. has been increasing, spurring new private sector investment across Metro Vancouver. Real estate services company CBRE recently reported that the Metro Vancouver industrial vacancy rate in the first quarter of 2017 was an incredibly low 2.2 per cent and the absorption levels in 2015 and 2016 were the highest ever recorded.
To put this in perspective, according to Site Economics Ltd., a 100,000-square-foot industrial building will result in an estimated 100 to 200 new additional permanent jobs (not including construction-related jobs) to the provincial economy.
When one considers almost 6.5 million square feet of new industrial space will be added to the market between 2016 and the end of 2017 (according to CBRE), the direct impacts of a strong industrial real estate market become obvious.
Consistent with this observation, the Business Council of B.C. has reported that light manufacturing and processing employment grew at a solid 19 per cent between 2013 and 2016.
Good policy leads to a strong economy. A strong economy breeds confidence. Confidence is what motivates new businesses to form and existing businesses to expand. All of these events lead to job growth and greater opportunities for people seeking employment in B.C.
Strong consumer and business confidence has also resulted in continued high demand from owner-users who wish to purchase both stand-alone buildings or strata units. These are businesses making significant long term investments in our province. Our latest project, the 80-acre Delta Link Business Park, is 70-per-cent committed to (sold or leased) and the roads are not even finished. This level of pre-commitment is unprecedented.
While our economy is strong now and confidence is high, there are threats ahead that could destabilize what we have been working so hard to build. Many projects are stalled because of a lack of resources at the city level to process applications. This is a challenge across the entire real estate market and is an area that must be addressed.
Our province has been a leader in economic growth and B.C.’s industrial market is the strongest in Canada. The B.C. government deserves credit for instilling confidence in those investing here. We are very concerned that a change in government will have significant negative economic consequences as the policies of the NDP will damage the all-important role of confidence and stall our economy. We hope that voters will keep this in mind on May 9.
Ryan Beedie is president of Beedie Development.
The B.C. government deserves credit for instilling confidence in those investing here.