Phase 1 of the new West Kelowna Industrial Park, which will soon be built in the British Columbia city, has sold out before construction begins.
Denciti Development Corp. is building its first project on a 10-acre site at 2648 Kyle Rd. The initial phase has been expanded to 76,000 square feet of space in the two buildings, and one of the structures has been purchased outright by a Vancouver investor who plans to lease it out.
The second building remains a strata project, accommodating smaller users with units up to 2,500 square feet. The first phase had originally been planned as two strata buildings.
Site preparation has been underway and construction is about to proceed on the buildings, which should be ready for occupancy by late 2020.
Phase 2 now being marketed
Denciti is now offering units in Phase 2 of the business park, which will be about 200,000 square feet on completion. The second and third phases will proceed as quickly as the market can absorb the space.
“The Kelowna population is projected to grow by more than 2,400 people per year over the next 20 years,” said Denciti founder Garry Fawley in a release announcing the update. “Increase in residential development supports the need for more industrial development because people need services close by. At the same time, in pockets where densification is going up, industrial vacancy is going down.
“Kelowna has these factors as well as cost savings. Land prices in Kelowna are an average of a third of the cost in Metro Vancouver and small businesses are looking to expand or locate here.”
Fawley founded Denciti in 2018 after recognizing the need for new industrial properties in the region.
Kelowna industrial vacancy low
The city is located in the Okanagan Valley about a 3 1/2-hour drive east of Metro Vancouver. The region contains about 200,000 residents and like Vancouver, is dealing with historically low industrial vacancy rates.
“Continuing a three-year trend, vacancy rates are declining, sitting at sub-one per cent currently and lease rates are rising, having increased 8.6 per cent over the past year,” said Steve Laursen, a commercial real estate broker at Royal LePage Kelowna, in the release. “Occupants are looking for longer-term solutions for their business but are having trouble finding quality available space. West Kelowna Industrial Park is ticking off the boxes.
“Businesses have the option to purchase industrial space and invest their hard-earned capital into a long-term solution, so it appeals to a diverse section of users, from light manufacturing to distribution. Rising lease rates have also piqued the interest of investors.”
The second and third phases will be able to accommodate larger users, Fawley said.
“There has been pent-up demand because this is the first new project in the area in seven years and we have strong interest in the remaining phases,” Fawley said in the release. “Kelowna has roughly only 80,000 square feet of vacant industrial space for the entire market available.
“The Kyle Road project provides much-needed industrial development to continue to facilitate economic growth in West Kelowna and provide the needed job space.”
Denciti Development Corporation is a Vancouver-based real estate development company creating urban industrial, commercial and residential development. The Denciti team has delivered over $2 billion of real estate across Canada.