Industrial Markets to Watch: West Abbotsford
If it isn’t already, here is why West Abbotsford should be on your radar whether you are an industrial business, investor or developer.
There are a few common misconceptions about Abbotsford’s industrial market, it is often thought of as a secondary market for commercial real estate, that there isn’t a lot going on “out there” and that there is an abundance of available land. These misconceptions are flat out wrong. In fact, West Abbotsford currently has the most industrial square footage in the permitting process or under construction than any other submarket in the Fraser Valley*.
Located less than 10 minutes from Gloucester Industrial Estates, West Abbotsford’s industrial sale prices and lease rates are now on par with Gloucester and some would argue that West Abbotsford has superior access. Access to Highway 1 via the Mount Lehman exit may be comparable, but West Abbotsford is home to the Abbotsford International Airport and has a more southern route to neighbourhoods across Langley and Surrey, like Aldergrove and Campbell Heights, all the way to Highway 99. Access will only improve in the area with several infrastructure projects in the immediate area, including the widening of Mount Lehman Road and the “Marshall Road Alignment”. West Abbotsford also boasts a large local employment base.
Rare Land and increasing prices
The disappearing inventory of industrial land is something that plagues municipalities across the Lower Mainland. In Abbotsford, the decision to not remove any land from the ALR earlier this year resulted in land prices increasing by $200,000 an acre overnight and many developers getting creative with what land was available.
The site of the future XCHANGE Business Park on Mt. Lehman Road (north of the Fraser Valley Auto Mall) is an example of land that was overlooked for years due to development hurdles. It is now the future home of a proposed 12 to 15 industrial buildings, equating to over 1 million square feet of industrial space in phase 1.
Sites that were deemed as too challenging in the past are starting to make financial sense to develop as lease rates and purchase prices continue to rise. West Abbotsford has recorded rapid growth in lease rates and strata pricing and these increases are impacting pricing elsewhere, as other markets look to West Abbotsford for price guidance.
A Solution: Oncoming Strata and Lease Projects
The shortage of industrial land also means fewer solutions for industrial businesses. The opportunity to build a custom facility is becoming increasingly rare so businesses are also getting creative. There are emerging trends of older buildings being retrofitted, long-term land leases (25 years+) and owner-occupiers purchasing excess space and then leasing it out until they grow into it. But, for many businesses, purchasing or leasing new construction is the most convenient real estate solution, and West Abbotsford has a lot to offer on both those fronts.
There is a relative abundance of strata and lease space coming to West Abbotsford in the next 12-24 months. As previously mentioned, there is currently over 3,000,000 square feet of industrial space in the permitting process or under construction. These new projects represent a good mix of different product types and cater to a range of business types.
Not included in the above numbers, are projects in the preliminary planning or design phases, which account for an additional 350,000+ square feet of future industrial space.
If you are a growing industrial business, already located in Abbotsford or considering moving there, now is a great time to start exploring the variety of real estate options coming available in West Abbotsford. Due to pent up demand and a historically low vacancy rate across the region, we recommend planning 8-12 months ahead of a move and acting fast as new inventory is being absorbed quickly.
Where is the development happening?
The map below illustrates where the different projects are, or will, be built. We are seeing development spread north and east, where there are larger land opportunities available.
The below projects highlight a few development projects that are in the works in West Abbotsford. These illustrate the type of units that are coming available in the immediate to near future. The location of each of these projects is also indicated on the above map.
1. Future Lease Project
3311 Mount Lehman Road
- Future industrial lease project
- Unit sizes TBD
- Dock and grade loading
- Exposure on Mt. Lehman Road
- Completion expected Q2 2020
- Built by Wesgroup Properties
2. Future Strata Project
30513 Great Northern Avenue
- Future industrial strata project
- 2,100 – 22,083 sf units
- Dock or grade loading (unit dependent)
- Completion expected Q2 2019
- Built by Bartek Construction
3. Marshall Road Business Centre
30722 Marshall Road
- Industrial strata project currently under construction
- 3,666 – 84,016 sf units
- Grade loading
- Exposure on Marshall Road
- Completion expected Q1 2019
- Built by Teck Construction
On The Radar
We are seeing a high level of confidence in the Abbotsford commercial real estate market, as a whole. This is in part due to the adoption of Abbotsford’s Official Community Plan in June 2016, which has helped establish commercial centres and boost revitalization while instilling confidence in investors and businesses regarding the city’s future and direction. If it wasn’t already, Abbotsford should be on your radar whether you are an industrial business, investor or developer.
If you would like any further information on the industrial market in West Abbotsford, including available properties and upcoming projects, please don’t hesitate to contact Frontline’s industrial real estate experts.
* Includes preliminary concepts/plans for XCHANGE Business Park
Sources: City of Abbotsford, Commercial Edge, CLS
Site plans and project details courtesy of Cushman and Wakefield, Avison Young, CBRE