WILLIAM WRIGHT COMMERCIAL REAL ESTATE SERVICES, CITIFIED — Citified’s ‘Commercial Real Estate Insight’ in partnership with William Wright Commercial Real Estate Services is a new monthly snap-shot series of market activity, market updates and trends. The first segment under this series provides a backdrop for industrial real-estate activity on the south Island, and references major projects underway or in planning.
Langford, the largest municipality among Victoria’s West Shore suburbs, has been at the forefront of population growth and development starts among the Capital’s 13 districts, with a 31.8% population increase between 2016 and 2021 to 46,584 people, which also earned the city a title of BC’s fastest-growing municipality and the third fastest-growing in all of Canada.
Sooke – a municipality further west of Langford and the western-most incorporated district within the Capital Region – ranked second in the region with a 16% population increase to 15,086 inhabitants as of 2021. The City of Colwood, which shares a border with Langford and extends to the Salish Sea waterfront, saw a 12.5% population rise to 18,961 people.
The Capital’s population growth has challenged the supply of industrial spaces for service businesses, warehouse operators and tradespeople. Demand from a growing region, meanwhile, continues to exert pressure on existing providers already operating at-capacity with limited expansion opportunities as new entrants limited by a lack of suitable real-estate offerings are squeezed by a dearth of vacancies.
To tackle the challenge, the City of Langford under pro-development Mayor Stew Young has been bullish on rezoning parcels to ‘Business Park’ zoning, allowing for a multitude of retail, industrial, and office uses.
Many prominent provincial and western Canada-based developers including Beedie, Strand Development, Bastion Development, PC Urban, Omicron, and Alberta-based 945 Developments have started strata industrial product construction and pre-sales on the West Shore.
Langford Heights, a partnership between Strand Development and Bastion Development, is a new industrial park earmarked for the Western Speedway lands in north Langford. The project will offer approximately 1,000,000 square feet of industrial and flex commercial space for lease with the first phase set to complete in the fourth quarter of 2023.
Beedie, one of Canada’s largest industrial developers and property managers, has recently recognized the promise and potential of southern Vancouver Island. Their first project, the Pacific Ridge Business Centre on Sooke Road in the Luxton area of Langford, will consist of five industrial buildings ranging from 13,700 square feet to 69,600 square feet as strata sale, build-to-suit, showroom, and workshop space. The company’s other project, already underway at 2750 Leigh Road in Langford, will offer seven industrial buildings totalling 755,000 square feet of build-to-suit and strata sale options by 2027.
Rising construction costs, scarcity of industrial land, limited inventory, and increased demand have pushed Victoria’s price-per-square-foot metrics for strata industrial to between $375 and $450, depending on location, access to arterial routes, exposure, and warehouse specs. Average triple net rental rates for industrial product have pushed to over $17 a square foot in the first quarter of 2022, leading to investment activity from Vancouver-based purchasers for industrial strata holdings.
The West Shore Business Park (WSBP) at the crest of West Shore Parkway in Langford, by 945 Developments, is now 100% sold out with all 32 strata industrial units going firm within 10 months of pre-sales hitting the market. WSBP is the first development to sell out of an approximate 525,000 square feet of strata industrial ownership opportunities currently being marketed on the West Shore.
The WSBP saw several units sold to investors, which will be a welcomed addition to the leasing inventory in Langford. Pre-leasing of the WSBP project is underway and with vacancy still at record lows, we foresee a strong amount of interest from businesses looking to move or expand into a new space on the West Shore.
Read the full article published by Citified.
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