It is at least a year away from signing its first tenants, but the Aboriginal-owned Kwikwetlem Business Park in Port Coquitlam is not expected to have much problem filling up due to Metro Vancouver’s severe industrial land shortage.
Metro’s industrial vacancy rate stands at 1.4%, the lowest in Canada. There are virtually no large parcels of industrial land left to develop, according to a second-quarter Colliers International survey.
Ron Giesbrecht, chief of the 107-member Kwikwetlem First Nation, also known as the Coquitlam Indian Band, said the site with frontage on Pitt River Road would be built out in three phases. The first phase will be a $15 million, 105,000-square-foot health and wellness centre for the use of band members and Tri-Cities residents.
The following phases, Giesbrecht said, “will be market driven.”
Those market drivers would likely steer toward distribution warehouses and light manufacturing, according to John Boer of Colliers, who will act as the listing agent for the park with fellow Colliers agent Chris Morrison.
Giesbrecht said the Kwikwetlem First Nation is primarily interested in attracting build-to-suit tenants, both commercial and light industrial, under long-term lease agreements to provide steady income. He said the band would consider leasing parcels of the land, which will be offered under 97-year agreements. Giesbrecht added that assessments pegged the leased land values at between $1.7 million and $2.25 million per acre.
The development is awaiting a master services agreement for water and sewer services with the City of Port Coquitlam, which began negotiations in October 2016. Laura Lee Richard, Port Coquitlam’s director of development, said a two-year delay for such an agreement is not uncommon.
Kwikwetlem Business Park represents the largest new addition to the industrial base in the Tri-Cities area. The local industrial vacancy rate is 1.7%, and less than 100,000 square feet of new space came to the market this year. Another 434,577 square feet is under construction, but the net absorption in the second quarter alone was north of 48,000 square feet.
The latest strata development in Port Coquitlam, by Conwest Group, will deliver 16 strata warehouse units with prices in the $325-per-square-foot range. The project is not yet at the marketing stage but has already received unsolicited offers.
First Nations have a history of industrial land development. The Tsawwassen First Nation (TFN) in Delta is developing the 300-acre Delta Logistics Centre, with 100 acres already leased. The project’s 200-acre second phase represents the last large parcel of industrial land available in Metro Vancouver. TFN’s preference is to lease fully serviced parcels of 15 to 20 acres. The few large parcels of industrial land available are being quickly absorbed. Metro Vancouver has had 20 straight quarters of positive absorption and new supply still struggles to meet demand, Colliers noted in its second-quarter report.
“Currently there is the greatest amount of industrial space under construction in the history of Metro Vancouver, but so far this has provided no relief to the lack of vacant space,” the report stated.
Industrial lease rates are increasing and prices have reached eye-popping levels. An example is the recent sale of a 49,000-square-foot industrial strata property in formerly affordable Pitt Meadows that sold for $9 million.