Major construction projects in the Okanagan fail to dampen demand or prices for industrial land - InfoNews

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Major construction projects in the Okanagan fail to dampen demand or prices for industrial land

This 65,000 square foot project on Dilworth Drive is helping add more than 200,000 square feet of industrial space to the city's 10 million square foot inventory.
October 31, 2019 - 6:30 PM

Despite the fact that more than 200,000 square feet of industrial space is under construction in Kelowna and another 14,000 planned for Vernon, there’s no shortage of demand for such space.

To put that into perspective, the proposed new Kelowna Costco is less than 160,000 square feet. Of course, that’s one building versus six Kelowna projects listed in a Colliers International report on the industrial land market in the third quarter of 2019.

“With both markets experiencing vacancy rates under two per cent despite the influx of new product on the market, the increase in industrial development moving forward is unlikely to increase vacancy as demand continues to outpace supply in these market conditions,” the report states.

While it covers the Thompson and Okanagan regions, no mention is made of Kamloops or Penticton.

Rental rates have grown by 8.6 per cent in Kelowna and 7.42 per cent in Vernon over the past year.

Kelowna has 10.4 million square feet of industrial buildings with a vacancy rate of 0.4 per cent with an average asking net rent of $14.68 per square foot.

Vernon offers 2.2 million square feet with a 1.6 per cent vacancy rate and rents of $10.42 per square foot.

Given the rising cost of industrial land, development is pushing towards the Kelowna airport and Lake Country.

The report doesn’t talk about the types of businesses pushing up the demand but other sources point to the legal cannabis industry as a major player.

PROJECTS UNDER CONSTRUCTION IN KELOWNA

Callahan Property Group has two projects listed. One is at Old Vernon Road and Acland Rd. with 29,657 square feet. The other is at 250 Beaver Lake Rd. with 60,675 square feet.

Goode properties Inc. is building 33,150 square feet at 710 Stremel Rd.

Intraurban Enterprise has a 65,000 square foot project at 1625 Dilworth Dr.

Two other projects don’t have developer’s names attached. One is 15,000 square feet at 8775 Jim Bailey Rd. and another has 32,536 square feet at 1985 and 2025 Pier Mac Way.


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