Annacis Island — Metro Vancouver's Last Real Heavy Industrial Submarket
Heavy manufacturing, outdoor storage and process-intensive uses have fewer and fewer places to go in Metro Vancouver. Annacis Island is still one of them, and the land base is fixed.
September 15, 2026 · 2 min read · By Samuel Brahem, in association with NAI Commercial
What the zoning allows
Two decades of rezoning, agricultural land limits and mixed-use conversion have shrunk the region's heavy industrial land. New construction is light industrial and business park. Annacis Island is zoned mainly I3 Heavy Industrial under Delta's Official Community Plan, and the uses that follow are the ones displaced everywhere else.
- Metal fabrication and heavy manufacturing
- Chemical processing and industrial coatings
- Concrete batching and aggregate handling
- Truck and heavy equipment yards
- Marine-dependent operations with deep-water or barge access on the Fraser
The 2026 numbers
Asking rates for standard heavy industrial warehouse on the island run roughly $16.00 to $20.00 per sq. ft. net as of mid-2026, bracketing the Delta average of about $17.91 in the Q2 2026 brokerage reports. That is a modest discount to Richmond, South Vancouver, Surrey and Port Coquitlam. Yard-heavy sites sit at the top of the range.
Delta vacancy averaged 4.7% in Q2 2026, a touch above the regional figure, but that number includes Tilbury's newer large-bay product. The island itself is about 1,200 acres with no greenfield left. Supply only comes from redevelopment or tenant turnover. Parcels with an acre or more of secured yard rarely hit the open market.
On Annacis Island, the yard is scarcer than the building.
Leases and investment
Tenants here invest in equipment and compliance, so leases run seven to ten years with fixed or CPI escalations of 2.5% to 3.5% a year. TI allowances are uncommon. Negotiate restoration obligations up front.
Stabilized single-tenant buildings with credit occupants traded in the 5.00% to 5.75% cap rate range in mid-2026, above the roughly 4.4% regional average Lee & Associates reported for Q2. Phase I and Phase II environmental work is standard on acquisitions; many sites carry decades of operating history. Delta's OCP keeps the island industrial, with no political push to rezone.
What to do
Tenants: expect thin availability, consider subleases and older buildings, and move quickly when something fits. Off-market flow matters more here than in any other Delta node. Owners: renewals are leverage, because your tenants have few places to relocate. Repositioning through remediation or lot reconfiguration unlocks value in a market that cannot add land.
