Port Kells Industrial Market Report 2023

Port Kells – The Crown Jewel of the Fraser Valley!

Port Kells’ industrial property values are holding best relative to values in its Fraser Valley counterparts, in spite of global economic uncertainty, inflation, and rising interest rates. From Q1 2021 to Q3 2022, industrial assets across all submarkets in the Fraser Valley saw an unprecedented rise in value. Over the past 6 months however, it has become clear that this momentum is tapering off, evidenced by stagnant listings, declining sale prices, and a general reduction in market activity. Despite this “slack” in the market, our data indicates that industrial properties in Port Kells are holding their values better than the rest. Here’s why:

Industrial Land

Generally, we are finding industrial land is the most inelastic industrial sub-asset in this declining market environment (i.e. prices are least volatile/changing the least). This is driven by scarcity and the well-known underpinning land supply problem. With centralized access to arterial routes in every direction, Port Kells remains steadfast as the submarket with the deepest buyer pool. While most industrial submarkets have seen a sharp reduction of up to 20% from peak land pricing, Port Kells is currently fairing much better. If you own a freestanding building in Port Kells, you may also own land – making your property worth more than you may think. Click here to read our article on excess land to learn more.

Industrial Strata

When market momentum is disrupted, we typically see industrial strata values impacted first; we are seeing that again in this current market cycle. Referencing the graph below, most industrial submarkets have seen a sharp reduction of up to 25% from peak strata pricing, Port Kells is currently trading only ~8% below peak pricing. Similar to the case for land, due to its preferred location in the Valley and its proximity to adjacent municipalities, strata prices remain the most competitive here – even during economic hard times.

Fraser Valley Industrial Strata Values 2019-Present

Fraser Valley Industrial Strata Values Drop from Peak Pricing

How does this impact my property’s value?

Curious how these trends have impacted your property’s value? Fill out the form below for a free, no-commitment property valuation.

2022 Port Kells Industrial Real Estate Transaction summary

Q1 2023 Port Kells Pricing

These prices are Frontline Real Estate Services’ opinion of current values for properties available with vacant possession. For tenanted properties, different prices are likely. Call us to discuss the current market for income-producing opportunities.

So What?

• Industrial real estate demand in the Fraser Valley is still highest for properties in Port Kells.
• Port Kells is the best place for long-term investment value.
• If you want or need to sell in the current market, Port Kells is the best place to be doing it.
• A declining market is the best time to trade up and Port Kells is the best market to trade up from since your relative dollars are the strongest in other markets.
• High lease rates and property values, in comparison to other markets, mean opportunity costs to own and operate in Port Kells are very high. Our most sophisticated clients have found efficiencies by retaining ownership and becoming landlords, then relocating their business and leasing in an adjacent market.

Sources: City of Surrey, Township of Langley, Commercial Edge, CLS, Frontline Real Estate Services Ltd.