Industrial Insight Report

Industrial Insight Report
Metro Vancouver | Q4 2016

Table of Contents
Metro Vancouver Overview 1
Metro Vancouver Area Map 2
Submarkets
Burnaby 3
Delta 4
Richmond 5
Surrey 6
Statistics 7
Contacts 8

Supply
Demand
Pricing
Market Update
Metro Vancouver | Q4 2016
Overall market shows sign of relief by way of rising availability & vacancy rate
Lease activity
The three top lease deals in the quarter were all completed in the Burnaby submarket.
The largest of which was K-Bro Linen Systems Inc.’s 115,384 square foot lease at
400 Fraser Reach Court, in Oxford’s Riverbend Business Park. This new construction
project is being happily welcomed, as the market has not seen new product of this
scale to lease for some time. The other two lease deals were also in Burnaby’s Big
Bend industrial node. Technosport leased 69,994 square feet at 5555 Trapp Avenue
and Western One Rentals & Sales leased 55,000 square feet at 5450 Byrne Road.
Rents
Similar to last quarter, as demand continues to outpace supply across Metro
Vancouver (MV), landlords responded by increasing the average asking net rental
rate. We expect this trend to continue through 2017.
Sales and Construction
Of the 4.6 million square feet of space under construction in MV, 1.1 million square
feet is in Surrey. The submarket continues to be the most active for new construction,
with Campbell Heights being the most active industrial node in it; Campbell Heights
has nine of the twelve developments in Surrey. The largest development in Surrey, at
214,155 square feet, is Hopewell’s South Surrey Business Park – Building 1 at 2830
188th Street, which is set to be complete in Q3 2017.
Economic outlook
Both British Columbia and Vancouver are expected – within the context of provinces
and top five cities - to lead the country in Real GDP growth in 2017, according to the
Conference Board of Canada. However, both are experiencing a decline to the growth
rates that were witnessed in 2016. Behind a slowdown in the housing market and a
lackluster demand for commodities, British Columbia is dropping from a Real GDP
growth rate of 3.8 percent to 2.7 percent. The Vancouver housing market, which has
propped up much of the past growth, is now hampered by the federal restriction
placed on mortgages and the provincial Foreign Buyer Tax. This is contributing to the
city’s Real GDP growth rate going from 4.0 percent in 2016 to 2.8 percent in 2017.
Despite these apparent slowdowns, the industrial market remains healthy, and there
continues to be strong demand to purchase industrial land and buildings.
RECENT SALES COMPARABLES (sorted by square feet)
RECENT LEASE COMPARABLES (sorted by square feet)
Key market indicators
12-month rent growth (%) 14.5%
Source: JLL Research
Arrows represent change from prior quarter
Net absorption, vacancy
2,000,000
1,500,000
1,000,000
500,000
sf 0
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
Average net rental rate
$10.00
$9.50
$9.00
$8.50
$8.00
Net absorption
Total vacancy
$7.50
2,257
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
Buyer Seller Location Site Size (acres) City Size (sf) Total Price Price / sf
Low Tide Properties Ltd. / PCI
Group
Total inventory (sf) 195,554,185
Total vacancy (%) 2.0%
Total availability (%) 4.0%
Q4 net absorption (sf) 116,498
2016 net absorption (sf) 2,423,291
Average net rental rate $9.80
Bradea Properties Ltd. 901 & 965 Great Northern Way 1.85 Vancouver 53,865 $34,600,000 $642
The Washington Companies Stancor Enterprises Ltd. 480 Audley Boulevard 14.97 Delta 45,090 $31,200,000 $692
Mr Western Holdings Corporation Glenlyon Developments Inc. 8900 Glenlyon Parkway 2.81 Burnaby 51,494 $17,700,000 $344
Tenant Location City Size (sf)
K-Bro Linen Systems Inc. 400 Fraser Reach Court Burnaby 115,384
Technosport 5555 Trapp Avenue Burnaby 69,994
Western One Rentals & Sales 5450 Byrne Road Burnaby 55,000
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 1
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%

MARKET
CHARACTERISTICS
Richmond has the
highest amount of
industrial inventory
in Metro Vancouver
1
Over 80 percent of
the industrial
building types are
distribution based
in Metro Vancouver
2
At 2,293 acres,
Surrey has the
highest amount of
vacant industrial
land*
3
GVA is expected to
add 1.2 million
more residents by
2041**
4
SUBMARKET STATISTICS
Property type
Total
inventory
(sf)
Total vacancy
(%)
Total
availability
(%)
Q3 total net
absorption
(sf)
Average direct
asking rent
($ psf)
Under
construction
(sf)
YTD
completions
Warehouse / Distribution 146,885,808 2.4% 5.4% 90,779 $8.70 4,621,568 3,522,243
Manufacturing 25,158,498 1.9% 2.9% 30,719 $10.06 0 0
Total Industrial 195,554,185 2.0% 4.0% 116,498 $9.80 4,621,568 3,722,243
* METRO VANCOUVER 2010 INDUSTRIAL LANDS INVENTORY
** Metro Vancouver 2040 Growth Projections, Metro Vancouver
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 2

Pricing
Demand
Supply
Burnaby
Lease activity
The Burnaby submarket experienced positive net absorption in each quarter
of the year, leading to an extremely low vacancy and availability rate for the
quarter. Although the vacancy rate did remain the same at 1.0 percent, it is
the lowest in MV. And, the availability rate dropped quarter-over-quarter by
1.0 percent.
Rents
The vacancy rate has remained relatively stable over the past three quarters;
in turn, the average asking net rental rates have shown little movement.
Quarter-over-quarter, the rental rate decreased by a minimal 1.0 percent to
reach $10.03 per square foot.
Sales
In terms of total dollar amount, the sale of 8900 Glenlyon Parkway is the third
largest sale of the quarter. The building is zoned Comprehensive
Development – Light Industrial, but does not have a warehouse component.
The building is R&D and office space, contributing to a higher price per
square foot being achieved.
Construction
Two buildings were completed and added to the inventory in the fourth
quarter. Adera and Sun Life completed their second phase at Eastlake
Campus – building A at 8331 Eastlake Drive and building B at 8333 Eastlake
Drive – for a combined total of 97,454 square feet. The final phase of the
development has a total of 128,000 square feet set to be complete in Q3
2017. Oxford Properties Group started construction on their second building
(Building 4) at Riverbend Business Park, located in the Big Bend industrial
node. The building is 208,262 square feet and is the largest building currently
under construction in the market. It is set to be complete in Q3 2017. Beedie
Development Group’s Crescent Business Centre – Building 2 originally set to
be complete in Q4 2017 now has an expected completion of Q1 2018.
Key market indicators
12-month rent growth (%) 16.1%
Source: JLL Research
Arrows represent change from prior quarter
Net absorption, vacancy
400,000
300,000
200,000
100,000
sf 0
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
Average net rental rate
$10.50
$10.00
$9.50
$9.00
$8.50
$8.00
Total inventory (sf) 27,214,876
Total vacancy (%) 1.0%
Total availability (%) 2.8%
Q4 net absorption (sf) 68,567
2016 net absorption (sf) 377,869
Average net rental rate $10.03
Net absorption
Total vacancy
$7.50
Q4 2015 Q1 2016 2,257 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
4.0%
3.0%
2.0%
1.0%
0.0%
RECENT SALES COMPARABLES (sorted by square feet)
Buyer Seller Location Site Size (acres) Size (sf) Total Price Price / sf
Mr Western Holdings
Corporation
Glenlyon Developments Inc. 8900 Glenlyon Parkway 2.81 51,494 $17,700,000 $344
Star Lowland Holdings
5784, 5820, 5824, 5826, 5828
Sun Processing Ltd.
Ltd.
Byrne Road
- 37,386 $13,583,333 -
RECENT LEASE COMPARABLES (sorted by square feet)
Type Owner / Landlord Location Intersection Size (sf)
New Oxford Properties Group 400 Fraser Reach Court Wiggins St/Riverbend Dr 115,384
New Big Bend Equities Inc. 5555 Trapp Avenue Wiggins St/Trapp Ave 69,994
JLL | Market Update | Metro Vancouver | Q4 2016| Page 3

Pricing
Demand
Supply
Delta
Lease activity
Negative net absorption for the quarter led to an increase in Delta’s vacancy
and availability rate. Despite this, the lease activity was strong in the 20,000
to 30,000 square foot range - there were four new deals that comprised a
total of 117,747 square feet. The tenant types that made up these deals were
varied in their businesses, and whether they were new to the market
(0970337 BC LTD.’s lease at 7783 Progress Way), relocating, or adding to
their exiting space (Medical Mart Supplies (West) Limited lease at 787
Cliveden).
Rents
Even with the rise in the vacancy and the availability rate, the amount of
demand, perceived and real, led to an increase in the average net rental rate.
Sales
As demand ramps up throughout MV, Delta remains an attractive market for
both investors and owner-users alike to buy into. An investor purchased 7580
MacDonald Road on a sale-leaseback at an approximate 5.0 percent cap
rate. Western Tank & Lining purchased 7192 Vantage Way in an off-market
sale. The 4,478 square foot building was the former home of J. & R. Hall
Transport Inc.
Construction
Beedie Development Group has started construction on the first phase of
their Delta Link Business Park. It consists of several build-to-suit buildings,
for a combined 400,000 square feet. Future phases of the Park will create
another 1.5 million square feet in total build-to-suit space. The walls are
being titled at GWL’s Tilbury Distribution Centre located at 9450 River Road.
The building is set to be complete in Q4 2017. A hub of new construction is
occurring on 92 nd Street. There are three build-to-suit developments being
constructed, all by Prism Construction. The developer completed TAS
Refrigerated Distribution’s 65,000 square foot building this quarter, also on
92nd Street.
Key market indicators
Source: JLL Research
Net absorption, vacancy
400,000
300,000
200,000
100,000
sf
0
-100,000
Source: JLL Research
Average net rental rate
$8.50
$8.00
$7.50
Total inventory (sf) 31,129,074
Total vacancy (%) 2.2%
Total availability (%) 4.8%
Q4 net absorption (sf) -37,451
YTD 2016 net absorption (sf) 663,104
Average net rental rate $8.13
12-month rent growth (%) 8.8%
Net absorption
Arrows represent change from prior quarter
Total vacancy
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
$7.00
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
2,257
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
RECENT SALES COMPARABLES (sorted by square feet)
Buyer Seller Location Site Size (acres) Size (sf) Total Price Price / sf
The Washington Companies Stancor Enterprises Ltd. 480 Audley Boulevard 14.97 45,090 $31,200,000 $692
Montegrappa Enterprises Inc. Delta Dynamics Inc. 7580 MacDonald Road 1.38 26,779 $5,125,000 $191
1093334 B.C. Ltd. Albion Consultants Ltd. 1638 Foster's Way 1.21 24,563 $4,900,000 $199
RECENT LEASE COMPARABLES (sorted by square feet)
Type Owner / Landlord Location Intersection Size (sf)
New Blue Sky Properties 7158 Progress Way 72 nd St/Progress Way 35,531
New Sun Life Unit 100 & 200, 787 Cliveden Place Cliveden Ave/Cliveden Pl 33,156
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 4

Pricing
Demand
Supply
Richmond
Lease activity
There were very few leases above 20,000 square feet in Richmond this
quarter. However, the two that were completed, were both by tenants with
energy related businesses. The larger of the two deals was Schneider
Electric’s renewal of 40,394 square feet at 22171 Fraserwood Way, in East
Richmond. The next was Photon Control Inc.’s new lease deal at 7158
Progress Way, in the Crestwood industrial node. On the whole, low vacancy
and availability rates continue to leave tenants with few options to relocate or
expand.
Rents
For four straight quarters, the average net rental rate in Richmond has
increased; it increased 4.0 percent since the first quarter of 2016. Oddly
enough, both the vacancy and availability rates increased quarter-overquarter.
We think that this submarket is still experiencing demand and
competition for quality space, and average net rental rates will continue to
rise in 2017.
Sales
With diminishing amounts of industrial land in Richmond, and in other
submarkets of MV, land continues to be targeted for strata development. The
sale of 11111 Twigg Place on Mitchell Island illustrates this as PC Urban
purchased 11.25 acres of net usable land for $20.5 million. On the land, the
developer plans to construct approximately 260,000 square feet as the next
phase of its successful InteraUrban development. Beedie Development
Group purchased 12.825 acres of land in East Richmond for 21.7 million. It
plans to build 300,000 square feet of strata.
Construction
The total amount of construction in Richmond dropped from the previous
quarter, due to the completion of Gateway Pacific Building Centre’s building
B. The building, located at 13268 Worster Court in the Crestwood industrial
node, brings 80,000 square feet of inventory to the market. With two built-tosuits
being constructed – a 32,000 square foot building at 13040 Worster
Court and a 32,000 square foot building at 6568 McMillan Way. Hopewell’s
330,540 square foot building at 16111 Blundell Road in South Richmond
remains the largest development under construction in the market.
Key market indicators
12-month rent growth (%) 4.1%
Source: JLL Research
Arrows represent change from prior quarter
Net new supply, vacancy
300,000
200,000
100,000
sf
0
-100,000
-200,000
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
Average net rental rate
$9.00
$8.80
$8.60
Total inventory (sf) 42,650,210
Total vacancy (%) 2.3%
Total availability (%) 4.2%
Q4 net absorption (sf) -23,746
2016 net absorption (sf) 63,125
Average net rental rate $8.93
Net absorption
$8.40
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
2,257
Total vacancy
4.0%
3.0%
2.0%
1.0%
0.0%
RECENT SALES COMPARABLES (sorted by square feet)
Buyer Seller Location Site Size (acres) Size (sf) Total Price Price / sf
BC Brick Supplies Ltd. Heather Equipment Ltd. 12160 Vickers Way 2.03 31,800 $8,000,000 $252
Grand Performance Holdings
Inc.
Heng Xing Holdings Limited
Wales Holdings Ltd. 12091 & 12131 Vulcan Way 1.12 24,952 $7,190,000 $288
Heng Xing Enterprises
Unit 1005 & 1010, Simpson
Road
- 6,154 $1,573,000 $256
(Canada) Co. Ltd.
RECENT LEASE COMPARABLES (sorted by square feet)
Type Owner / Landlord Location Intersection Size (sf)
Renewal Dayhu Investments Ltd. 22171 Fraserwood Way Fraserwood Wy 40,394
New
Wing Quon Properties and
Investments Ltd.
13500 Verdun Place Viking Wy/Bridgeport Rd 28,914
New Bentall Kennedy Unit 110 & 120, 13268 Worster Court Worster Court 26,442
New Bentall Kennedy Unit 160, 13268 Worster Court Worster Court 13,032
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 5

Pricing
Demand
Supply
Surrey
Lease activity
The momentum that built in the third quarter carried into the fourth quarter,
and then some. The quarter had 545,314 square feet of positive net
absorption, contributing largely to the 1.3 million square feet of net absorption
that the submarket experienced for 2016. Surrey is a healthy submarket; a lot
of new construction and new tenants are entering the market, taking
advantage of the available land and somewhat more reasonable average
asking rental rates.
Rents
Average asking rents remained in the low $9 per square foot range, as they
did in the third quarter. With the amount of new supply to market, we except
higher average asking rents for this new generation of product.
Sales
Similar to last quarter, the total amount of building sales in MV was highest in
Surrey, with a total of 12. The submarket continues to be an attractive
destination for owner-users that want to purchase their own building or strata
unit, but are unable to compete with the prices being placed on similar
product in the core markets. Of the industrial nodes within the submarket,
Newton experienced a large portion of the activity, with four total sales.
Key market indicators
12-month rent growth (%) 15.7%
Source: JLL Research
Arrows represent change from prior quarter
Net absorption, vacancy
600,000
400,000
200,000
Total inventory (sf) 29,376,695
Total vacancy (%) 2.7%
Total availability (%) 4.4%
Q4 net absorption (sf) 545,314
2016 net absorption (sf) 1,356,628
Average net rental rate $9.27
Net absorption
Total vacancy
sf
0
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
6.0%
4.0%
2.0%
0.0%
Construction
At 1.1 million square feet, the amount of total construction in Surrey dropped
Average net rental rate
slightly from Q3 to Q4 2016, as Teck Construction completed 22,215 square $9.50
feet at 18877 96th Avenue. Next quarter, there is expected to be 282,090
$9.00
square feet of new construction complete, all in Campbell Heights. Surrey
$8.50
continues to have the highest level of construction in MV, and with another
$8.00
787,312 square feet being planned, this will likely remain the same. The
$7.50
majority of this new construction will be happening in Campbell Heights, as
all the phases of the industrial node get built-out. 2,257
$7.00
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: JLL Research
RECENT SALES COMPARABLES (sorted by square feet)
Buyer Seller Location Site Size (acres) Size (sf) Total Price Price / sf
Surrey Comber Way Holdings
Ltd.
Virtuous Properties Ltd.
I.XL properties Ltd. 13240 Comber Way 2.00 9,755 $5,250,000 $538
F-Pacific Optical
Communication Co. Ltd.
19028 27th Avenue 1.58 33,654 $3,800,000 $133
Animus Business Corp. Ireks North America Ltd. 17733 66th Avenue 1.24 13,311 $3,200,000 $240
RECENT LEASE COMPARABLES (sorted by square feet)
Type Owner / Landlord Location Intersection Size (sf)
New Kief Holdings Ltd. 13139 80th Ave 123 St/80 Ave 65,462
New Lloyd Investments Ltd. 19440 Enterprise Way Enterprise Wy/60 Ave 35,995
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 6

Metro Vancouver statistics
Property type
Total
inventory
(sf)
Total vacancy
(%)
Total
availability
(%)
Q4 total net
absorption
(sf)
Average direct
asking rent
($ psf)
Under
construction
(sf)
2016
completions
Surrey
Warehouse / Distribution 20,796,822 2.9% 5.0% 490,782 $10.09 1,184,578 1,189,215
Manufacturing 5,479,836 1.7% 1.5% 40,899 $9.53 0 0
Total Industrial 29,376,695 2.7% 4.4% 545,314 $9.27 1,184,578 1,189,215
Richmond
Warehouse / Distribution 34,609,989 1.9% 3.8% -30,806 $8.67 443,092 260,678
Manufacturing 1,865,505 1.7% 2.9% 15,060 $7.86 0 0
Total Industrial 42,650,210 2.3% 4.2% -23,746 $8.93 443,092 260,678
Delta
Warehouse / Distribution 20,498,826 2.4% 4.7% -15,678 $8.04 922,542 218,081
Manufacturing 9,208,866 1.5% 1.9% -5,556 $7.85 0 0
Total Industrial 31,129,074 2.2% 4.8% -37,451 $8.13 922,542 218,081
Burnaby
Warehouse / Distribution 20,146,072 1.6% 2.5% 45,126 $9.75 617,338 385,665
1 2 3 4
Manufacturing 1,481,755 1.3% 4.1% 20,157 $9.84 0 0
Total Industrial 27,214,876 1.0% 2.8% 68,567 $10.03 617,338 385,665
Metro Vancouver Overview
Warehouse / Distribution 146,885,808 2.4% 5.4% 90,779 $8.70 4,621,568 3,522,243
Manufacturing 25,158,498 1.9% 2.9% 30,719 $10.06 0 0
Total Industrial 195,554,185 2.0% 4.0% 116,498 $9.80 4,621,568 3,722,243
Metro Vancouver numbers include: Vancouver, Burnaby, Delta, Richmond, Surrey, Coquitlam, Port Coquitlam, North Vancouver, New Westminster, Langley. The total
numbers include Flex / R&D space.
JLL | Market Update | Metro Vancouver | Q4 2016 | Page 6

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased
value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4
billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients,
the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and
completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management,
has $55.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For
further information, visit www.jll.com.
About JLL Research
JLL’s research team delivers intelligence, analysis, and insight through market-leading reports and services that illuminate today’s commercial real
estate dynamics and identify tomorrow’s challenges and opportunities. Our 415 professional researchers track and analyze economic and property
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Office locations:
TORONTO
199 Bay Street, Suite 4610
Toronto, ON M5L 1G3
Tel: +1 416 304 6000
Fax: +1 416 304 6001
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Toronto, ON M2J 4R3
Tel: +1 674 728 0457
Fax: +1 674 642 0195
MISSISSAUGA
110 Matheson Blvd W, Suite 107
Mississauga, ON L5R 4G7
Tel +1 905 502 6116
Fax +1 905 502 5466
MONTRÉAL
1, Place Ville Marie, Suite 3838
Montréal, QC H3B 4M6
Tel +1 514 849 8849
Fax +1 514 849 6919
OTTAWA
275 Slater Street, Suite 1004
Ottawa, ON K1P 5H9
Tel +1 613 656 0145
Fax +1 613 288 0109
EDMONTON
10088 – 102 Avenue, Suite No. 2101
Edmonton, AB T5J 2Z1
Tel +1 780 328 2550
Fax +1 780 328 5486
CALGARY
301-8th Avenue SW, Suite 500
Calgary, AB T2P 1C5
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Tel +1 604 998 6001
Fax +1 604 998 6018
For more information, please contact:
Thomas Forr
Research Manager
+1 416 304 6047
thomas.forr@am.jll.com
Ben Wedge
Industrial Research Coordinator
+1 604 998 6032
ben.wedge@am.jll.com
Bruno Fiorvento*
Executive Vice President
+1 604 998 6006
bruno.fiorvento@am.jll.com
*Personal Real Estate Corporation
www.jll.ca/research
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