How Industrial Intensification Has Evolved

Technology and e-commerce push industries to evolve at an exponential rate. Businesses are more focused on integrating work space activities, including manufacturing, design, showroom, and distribution activities.

Population and employment has exploded in the Metropolitan Vancouver area during the post-war era. It is projected to continue growing in the decades to come, with over 1,000,000 people and around 600,000 new jobs by the year 2040.

This level of growth will be tough to accommodate given the constraints of the Metro Vancouver area, as their expansion abilities are severely limited. Some protection was introduced under the Metro 2040 plan for the remaining land that is still left.

A constrained supply of land can be transformed into innovative multistory industrial buildings. Metro 2040 has included requirements for all municipalities to develop policies as well as encourage better intensification and utilization of industrial areas for industrial use.

Companies are currently dealing with population and economic growth, increased demand for space, and land supply constraints. Industrial land intensification opportunities including multistory industrial facilities, commonly referred to as “stacked” or “vertical,” are driving these current trends and challenging existing planning regulations all at the same time.

Industrial properties are no longer housed inside of single-story buildings on the fringe of an urban community. New kinds of industrial land intensification, including industrial real-estate, commercial real-estate, steel buildings, multilevel buildings, and other multistory structures, offer additional space for businesses to boost and expand employment growth opportunities within communities.

In Vancouver, industrial land developers, tenants, investors, elected officials, and planners realize how important industrial lands are to promote the area’s overall sustainable development. In order for a region to remain prosperous, a diversified, sustainable economy is necessary, and an adequate land supply is required to accommodate businesses in the long-term.

In this article we will discuss:

Industrial Land Depletion

What Is Industrial Intensification?

Industrial Land Usage Can Be Described In Two Different Ways

Evolving Industrial Activities

Building Up: Challenges

Considerations For Municipal Policies And Plans

Considerations For The Future

NAIOP Vancouver Involvement

International Best Practices

 

Industrial Land Depletion

To illustrate the depletion of industrial land inventory in proportion to the current demand for land, there are two different scenarios to take into consideration: an increase proportional to current industrial development, and increased land demand due to “High Case” growth in trade activities along Vancouver’s ports.

Under the first scenario for proportional growth, by 2021, industrial demand would require 900 additional hectares and 700 more hectares by 2031 without intensification.

Under the second scenario for Base Plus High Case Export/Import Growth, by 2021, the demand for industrial land would require 1,400 additional hectares and 1,100 more hectares by 2031.

If industrial land is used more efficiently, the effective capacity of the land could be greatly extended.

What Is Industrial Intensification?

Industrial intensification, by definition, refers to increased productivity within an industrial property or greater use of the structure. Examples include additional shift workers, distribution centers containing high ceilings with racking, investments to automation, or other multilevel structures in urban areas.

The main objective of industrial land use intensification is to make sure that the limited available land space in Vancouver, and other regions, is used efficiently and productively. In order to achieve this goal and ensure that guidelines aren’t putting one industrial sector or sub-region at a disadvantage, the best approach is to use more than one measure of intensification to level the playing field.

Differences in intensification potentially exist in most industrial sectors. The types of businesses that are occupying the space have a variety of different operational requirements, and what any industry or business demands from a building or site can significantly vary. Boosting industrial intensity is different for each user or industry, which is why policy makers in Vancouver have been arguing that specific targets and measures of intensity must be developed for all industrial sub-sectors.

Industrial Land Usage Can Be Described In Two Different Ways

Intensity

Intensity is the volume of activity which can be measured by the number of jobs per land area or building, or the amount of goods being processed or produced per unit.

Density refers to the amount of space inside of a building including building volumes and heights, site coverage, or floor area ratio. Higher densities are usually correlated with higher intensities, but not always. One exception includes land-intensive industrial buildings or commercial property with high throughput activity that doesn’t necessitate a large structure, like a lumber mill. These activities require land for outdoor material and equipment for storage, vehicle parking, and truck loading.

Intensification: Drivers And Benefits

Multistory industrial structures are common in East Asia. Companies have either had to fulfill or build up their space requirements due to lack of affordable land. In order for these types of structures to be viable, however, land values must be high enough to justify the added development costs.

There are only a few multilevel structures in North America, but more projects are taking shape in places with expensive land values such as New York, San Francisco, Seattle, and New York.

Metro Vancouver, for instance, has the largest port in Canada and a population of over 2.5 million. Industrial land space has shrunk considerably in the region, manifesting itself in a variety of ways, including low vacancy and rental rates, and rising land prices that are the highest in North America. A study from Colliers International from the third quarter of 2019 showed that, for the 10th consecutive quarter, the industrial vacancy rate for Vancouver was below 2%. Currently, the average triple net rent has gone up 25% over the last two years. The forces that are propelling supply-and-demand are stimulating dense and intense forms of industrial expansion, such as multistory industrial facilities.

Numerous benefits for the community and the industry in jurisdictions with constrained land bases are feasible with industrial intensification such as: using resources more efficiently, reducing pressures on land development in the region, and conversions from agricultural to industrial.

Creating additional industrial space and increasing capacity for industrial use by constructing multilevel industrial structures is becoming more difficult, as industrial land use becomes harder to find.

Co-locating or clustering associated operations supports circular-economy systems and eco-industrial networks. Companies use these innovative complexes to share resources, such as peer-to-peer lending or to use each other’s by-products (e.g. material loops) in order to boost efficiency.

This will become important and inevitable in the long term given the limited amount of land that is left.

Evolving Industrial Activities

Industrial and accessory uses are becoming more diverse and evolving rapidly. Some uses necessitate new and different kinds of spaces.

Some commercial activities do not neatly fit within traditional industrial concepts of “light” or “heavy” and can range from creative/media/design, advanced technology, the emerging e-commerce sector, industrial assembly/fabrication in flex space units, local “maker movement” craftsmanship, laboratories, workshops, equipment maintenance, food processing, manufacturing and warehousing in small-scale operations (parts suppliers) or large one-user buildings, and conventional distribution.

Industrial areas may contain commercial or accessory activities that are related to or support primary industrial use. They can also provide local employees with amenities. If too much retail or office space is allowed, established industrial uses could either be displaced or become destabilized by increasing property rents, taxes, and land costs, and introduce conflicts regarding land use.

metal framing machine

wall panel machines

steel frame house construction