Province
The value of industrial land in Greater Vancouver has fallen by up to a third over the past year as sellers slashed the price of properties, Avison Young said Tuesday.
Industrial-land values in the area have fallen by as much as 25 to 30 per cent over the past year, Avison Young principal Rob Gritten said.
“If there is no demand to build, it is no surprise vacant land is the first asset to be disposed of,” Gritten said.
“Speculators who entered this market in the late stages of the bubble, and with no income to support carrying costs, have been forced to discount significantly to attract bids.” In a report, the real-estate services firm said the regional market has seen few land sales over the past six months, leaving sellers with “more realistic expectations.” Average land prices in the region doubled from 2003 to 2008, reaching about $600,000 an acre in Abbotsford and $2 million in Vancouver, Avison Young said.
At the moment, regional prices typically range from $400,000 to $1 million per acre, depending on location and condition, the report said.
The exceptions are Vancouver and the North Shore, where limited supply has kept values at more than $2 million per acre, Avison Young said.
The industrial vacancy rate in Greater Vancouver climbed to 4.4 per cent in the third quarter of 2009 from 3.2 per cent in the spring of this year and 2.4 per cent in the fall of 2008.
“While some tenants tried to hang on to see if they could weather the storm, many couldn’t and had to close or reduce their square footage,” Avison Young principal John Lecky said.
“However, this trend is not expected to continue.” The region’s overall vacancy rate is still among the lowest in North America, the report said.
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