Kelowna's industrial real estate vacancy rate jumps, as do prices

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The vacancy rate for industrial real estate actually increased in Kelowna over the past 12 months, but that doesn’t mean it isn’t still in high demand.

The vacancy rate, according to MCL Real Estate Group’s quarterly update, increased approximately 1% to 1.9% in 2020.

“It’s been a busy but challenging year,” MCL senior commercial specialist and team lead Kris McLaughlin wrote in the report. “We see 2021 being more of the same in the industrial sector in Kelowna. Available inventory remains low, available industrial development land remains scarce, competition is increasing, and we are seeing lease rates and prices steadily increase.”

MCL reports industrial space grew by about 6.7% last year with the addition of 718,125 square feet, and most of that occurred in the North Kelowna industrial area, Airport Business Park and North End of downtown Kelowna. Another 768,971 square feet is currently under construction, and 676,576 square feet has been proposed.

There is approximately 11,400,000 square feet of total industrial space in Kelowna. The price range for an acre is between $1.4 million and $2.3 million. And that is why there has been an increase in industrial strata developments in Kelowna recently.

“With limited industrial land available and prices increasing, developers are able to pay these increased prices for the land for strata type developments, as the return is greater on a per square foot basis,” McLaughlin wrote.