Why Metro Vancouver Industrial Supply Cannot Catch Up — The Land Constraint
Metro Vancouver's industrial land shortage is not a cycle. It is geography, the ALR and municipal boundaries, and none of them move. Every leasing, buying and holding decision in this market should start from that fact.
October 8, 2026 · 2 min read · By Samuel Brahem, in association with NAI Commercial
The numbers
- About 10,500 hectares of industrial land across the region; fewer than 400 hectares vacant and developable as of mid-2026, and falling.
- The ALR protects roughly 4,700 hectares, removing most of the flat, serviceable valley floor.
- Average absorption of about 2.2 million sq. ft. a year from 2015 to 2025, against inconsistent deliveries.
- Vacancy below 1% in 2022, at or under 1.5% through 2025, and about 1.8% in Q3 2026. Balance would be 4% to 5%.
Where the last land sits
Three areas carry the remaining supply. Campbell Heights is approaching build-out; the 32 Avenue widening unlocks final phases measured in hundreds of acres. Langley and Aldergrove hold the most land but need road, water and sewer investment that stretches timelines. Delta's Tilbury corridor is close to Fraser Surrey Docks and planned LNG infrastructure, but large users have already taken much of it.
Unlike Calgary, the GTA or Seattle-Tacoma with its Kent Valley, this region has no outward expansion zone.
What scarcity has done to pricing
Core land in Vancouver, Burnaby and Richmond now exceeds $3.5 million per acre, with select sites above $4 million. Eastern submarkets run $1.5 to $2.2 million per acre for serviced, entitled parcels. Class A asking rents sit at $22 to $28 per sq. ft. net in most submarkets and $26 to $32 in Vancouver and Burnaby, roughly double the $12 to $15 of a decade ago.
There is no land bank waiting to absorb a development surge. Any recovery in demand re-tightens the market fast.
Intensification helps, but only partly
Big Bend, Richmond and the False Creek Flats permit multi-storey industrial and higher coverage. Stacked buildings cost far more per sq. ft. and cannot house heavy manufacturing, cold storage or grade-loaded logistics. They serve light industrial and small-bay users and do little for the large-format demand that drives absorption.
What to do
- Tenants: start renewals 18 to 24 months before expiry, test relocation options early, and treat build-to-suit as a real path for some sizes.
- Owners: review underused yards and aging improvements for higher and better use.
- Investors: underwrite hold periods, exits and rent growth on the basis that scarcity is permanent, not speculative.
