With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/296829
May 2014 BCBusiness 51 in logistics and distribution related to our growing ports. He says we will con- tinue to see growth in this part of our industrial market (where it is already a dominant player), with a continued ero- sion of labour-intensive manufacturing. "Distribution continues to be our prime industrial activity," he says, "and that's not only for finished products like TVs, but coal and primary resources coming out of our province." As the developed world's comfort with buying everything from cars to vegetables online increases, the way we distribute goods to consumers will need to change. Amazon is currently shop- ping for a million square feet of indus- trial space in Western Canada, and the choice has come down to Greater Van- couver or Calgary. Simultaneously, Best Buy is in consolidation mode, vacating a 200,000-square-foot facility in the region. "Best Buy's needs are shrinking because Amazon's needs keep going up," says Gritten. If Amazon and its peers in online commerce are challenging the old Walmart model of bricks-and-mortar stores supplied by dedicated ware- houses, that would mean a sea change for the region's third-party logistics businesses currently occupying indus- trial space. In the past, a company like Sony or LG would hire these logistics companies to provide warehousing and product management services out of an industrial space (typically in the 200,000-square-foot range), servic- ing four or five corporate customers. According to Avison Young's Gritten, a company like Amazon needs to turn around its product twice as fast as the typical user of a third-party logistics service provider. "All these third-party logistics guys are looking over their shoulders and asking, 'What is Amazon going to do to me? They're starting to sell product that my customers sell—and they're selling it more efficiently and twice as fast.'" As users of industrial space are evolv- ing, so too is the geography of opera- tions. Squeezed out of the urban core of Vancouver-Burnaby-New Westmin- ster, industrial land today is following a migration of people to the Langley- Surrey-Delta corridor south of the Fra- ser. The completion of the South Fraser Perimeter Road will hasten this shift. Land close to this new four-lane expressway connecting Deltaport to Highway 1 is ideally situated for industrial use, and the Dayhu Group of Companies has already jumped in. Dayhu's new Boundary Bay industrial park, scheduled to open this month, boasts ready access to the South Fra- ser Perimeter Road, Deltaport, the Canada/U.S. border and rail networks. The 440,000-square-foot facility is just phase one of a planned two-part devel- opment: Dayhu is planning a mirror development on an adjacent site, bring- ing the distribution centre to just shy of a million square feet. While the shores of Vancouver's False Creek may have once been where indus- try and commerce fought over scarce land, today places like Delta and Rich- mond are the battleground pitting the needs of industry against agriculture. In Delta, hundreds of acres were removed from the ALR as part of the Tsawwassen First Nation treaty, while the South Fra- ser Perimeter Road—much of it built on ALR land—is providing new access to an ever-expanding Deltaport. A proposed second container terminal at Roberts Bank, now in the earliest stages of an environmental assessment, would see a 50 per cent increase in container capac- ity. And last December a consortium led by Vancouver developer Ron Emerson extended multiple option-to-purchase agreements for ALR land near to both rail lines and Deltaport, with a vision to create a new "intermodal" yard to load and unload rail cars. For its part, Port Metro Vancouver owns and manages more than 1,000 hectares of land as an agent of the fed- eral Crown, which gives it the power to remove ALR land it owns without recourse from the province or munici- palities. The port's ongoing land-use plan includes packages of port-owned farmland that is also in the ALR, much of it in Richmond. "The last thing we want to do is develop agricultural land for industrial purposes; we really don't want to do that," says Tom Corsie, Port Metro Vancouver's vice-president of real estate. But eventually, he concedes, exclusions will have to take place. Avison Young's Gritten admits he is frustrated by the ALR. He says provincial politicians are afraid to make necessary changes because they risk alienating a well-meaning, uninformed public. "It's easy to stand up with a placard and say we need the farmland to grow tomatoes, but maybe tomatoes shouldn't be grown here," he says. "We've just spent billions bcbusiness.ca BIG BOXES As cargo increasingly shifts from bulk resources to container goods, shippers need space, and lots of it. While the shores of Vancouver's False Creek may have once been where industry and commerce fought over scarce land, today places like Delta and Richmond are the battleground pitting the needs of industry against agriculture p48-54_IndRealEstate_may.indd 51 2014-04-10 9:01 AM