Pressure is mounting dramatically to find new industrial land in the Lower Mainland and preserve the sites that exist as the volume of goods arriving at the region's ports keeps increasing.
A port official said demand is urgent for distribution centres near Deltaport to handle the constant re-sorting of contents that is essential in the container business.
"Once the Terminal 2 project is done in Delta [and the available land around that is used up,] there literally is nothing left," Port Metro Vancouver chief executive officer Robin Silvester said as his agency announced on Monday that the port had yet another huge bump in volume for 2013. "We project the current inventory will be used up in the early 2020s."
Port traffic increased nine per cent overall in 2013 compared to the previous year. Container traffic increased four per cent.
Besides increasing volume, Mr. Silvester said industrial lands are under threat as municipalities go along with requests to convert them to other uses.
The region has lost 3,000 hectares of industrial land over the past 30 years.
Now, Imperial Oil is trying to sell 232 acres (94 hectares) of oil refinery and storage land in Port Moody and Anmore, with the city councils not making any public objections to date. And in Richmond, a 19-acre (8-hectare) site on Duck Island at the north end of No. 3 Road has just been sold after being marketed as a future mixed-use development.
The shortage of industrial land has prompted many commercial real-estate brokers and industry analysts to demand that some agricultural land around Delta be converted for industrial use.
Mr. Silvester said the port does not want that.
But if the region keeps losing big chunks of industrial land to condos and offices, few choices are left. "The only release valve left becomes agricultural land."
The port's 2013 numbers come with the rare opening of a new industrial park near Deltaport.
The Dayhu Group is in the last stages of building a 47-acre (19-hectare) industrial park in Boundary Bay – not the closest land to the port, but the nearest anyone has been able to find in recent memory.
Dayhu already has one tenant, Apps Express, a logistics company that specializes in sorting and packing goods for containers that are coming and going from the port.
The recently opened South Fraser Perimeter Road, which connects Deltaport with Highway 1, has prompted huge interest in finding new industrial space in the area, Dayhu COO Paul Tilbury said.
He said his company's park, which will open in April, does not come close to meeting the demand.
"The Lower Mainland can absorb about 300 to 400 acres (120 to 160 hectares) a year to keep pace with the expected port expansion," he said.
The Tsawwassen First Nation is planning to develop 200 acres (80 hectares) of industrial land near the port, but that will not meet the demand either.
A commercial real-estate broker who works in the area said investors have looked at trying to assemble land along the perimeter road or Highway 1 to create more of the kind of modern industrial facilities – 36-foot ceilings, mechanized loading equipment – the port needs.
But that is proving difficult, said Ryan Kerr of Avison Young.
Any land that is available is selling at stiff prices of between $1.1-million and $1.5-million per acre for small sites, making it economically challenging for a company to assemble big plots.
Like the Port Metro boss, Mr. Kerr said the province, which controls agricultural land, or Metro Vancouver, which controls industrial zoning, is going to have to figure out a solution soon.
"It's something that's going to have to come to a head."