VIREB Commercial Realtors Seeing Growth in Market North of the Malahat
NANAIMO – Ever since COVID restrictions began to be lifted, the sale and demand for industrial properties within the Vancouver Island Real Estate Board region has jumped significantly.
The territory north of the Malahat has been discovered by outside buyers, and sales have risen significantly for revenue producing properties. At the same time, there is a relative scarcity for industrial land and units, and inquiries continue to outnumber what is available in the marketplace.
John Hankins
“Ever since we first emerged from the first COVID lockdown, the demand for commercial has been strong. If it’s priced right, it’s moving quick,” says John Hankins of NAI Commercial in Nanaimo. “There are a lot of developers in Vancouver looking at space and opportunities. The Island is definitely getting a lot of focus.”
Hankins notes a colleague has dubbed industrial as “employment land”, pointing to the fact that buildings on industrial sites are homes to job-creating businesses.
“These properties help bring employment to the area,” he adds.
Immediate demand calls for a logistics hub and light manufacturing facilities, and Hankins has clients looking for industrial space in the Parksville area to buy or lease.
New industrial property is on the horizon, however, as the massive Sandstone development straddling the Trans Canada Highway in south Nanaimo is now proceeding to public hearing after passing first and second reading at city council. It includes 90 hectares for industrial and light-industrial use. There are also rumblings that the owners of the residential-zoned Cable Bay area east of Harmac are considering looking at industrial zoning. And there is always interest in Duke Point lands.
Mike Mullin
Mike Mullin of Pemberton Holmes Ltd. in the Comox Valley focuses on two main asset classes – mobile home parks and multi-family apartments. He is also Chair of the VIREB Commercial Division this year, and Hankins will be Chair in 2022.
As in industrial, there is a lack of product on the market.
Mullin notes that when the federal government announced its first national housing strategy in 2017 that included $40 billion towards affordable housing – which has since jumped to a $70 billion injection, that has helped spur the number of multi-housing units under construction.
“Between Campbell River and the Comox Valley, I can think of seven buildings that have opened in the last 18 months,” he observes. “Tenants are flocking to the new buildings, and rightfully so.”
Larger investors like pension funds and Real Estate Investment Trusts (REITS) pursue the larger buildings, while smaller investors may start with four-plexes, moving up to 40-50 unit apartment complexes, he says.
Mullin notes there continues to be concern about the provincial government’s property transfer tax premium of 2% totaling 5.0% , on all residential units sold for $3 million or more, which inexplicably applies to properties like multi-family rental buildings and mobile home parks – units that represent affordable housing.
“In cases like this, the provincial government has been taxing affordable housing. For a recent $3.9 million purchase of a mobile home park in Terrace, the property transfer tax came to $125,000. Then the government turns around and says ‘We need affordable housing’,” he states. “That needs to change.”
