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Kelowna industrial real estate report: ‘We are sub 1 per cent of vacancy’

New industrial real estate report: vacancy below 1%

Kelowna’s heavy industrial sector, where well-paying trade jobs are usually found, is the latest to feel the real estate squeeze. 

A new report says in 2019, the demand for industrial space has outpaced the supply.

“There is already a shortage of industrial inventory around,” said Kris McLaughlin, a RE/MAX Kelowna commercial realtor. “Our report goes to read that we are sub one per cent of vacancy.”

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The report says industrial land has become scarce, leasable space is rare and the cost on industrial strata units are increasing to heights that haven’t been seen in Kelowna.

“That’s a big problem that we see,” said McLaughlin. “If we are losing these industrial parcels, some of the industrial uses only fit in industrial zones.”

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The report says in 2019, the demand for industrial space has outpaced the supply.

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“The inventory for a lot of these uses is tight today,” McLaughlin told Global News on Tuesday.

“It’s going to continue to stay tight in the future.”

The Tolko mill closure on Kelowna’s waterfront and the future of the valuable 39-acre site has had a major impact on Kelowna’s industrial market. 

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While this land is currently zoned for heavy industrial use, rezoning to commercial or residential high-rise buildings instead would compound the issue of little to no industrial vacancy.

When Global News reached out to Tolko, it said, “there are currently no future plans for Tolko’s Kelowna property and the project team is concentrating on decommissioning the site.”

Currently, the land is assessed at $19 million dollars, but the report says, based on other industrial land averages, a more realistic value is closer to $48 million.

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When Global News asked the city if they had any visions for the Tolko mill, it said that “it’s still private land and zoned industrial, so it’s in the hands of Tolko about what happens there.”

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The report says the Northern part of Kelowna, near the Lake country border, continues to emerge as the dominant industrial area for new growth.

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The report says of the new industrial projects that are currently under construction in Kelowna, just over 50 per cent is being constructed in the North Kelowna industrial area. 

The area has an additional 300,000 square feet of more industrial space in the proposal stage.