Port Kells has emerged as one of Metro Vancouver's most active industrial development corridors over the past three years. With Campbell Heights largely built out and the Agricultural Land Reserve constraining expansion elsewhere in Surrey, developers have turned their attention to the triangular pocket bounded by the Fraser Highway, 96 Avenue, and the Langley border. As of October 2026, the Port Kells development pipeline contains approximately 1.8 million square feet of industrial space either under construction or in advanced permitting—a supply injection that will reshape leasing dynamics across Surrey and the broader Fraser Valley industrial market.
Current Construction Activity
Three significant projects are actively under construction in Port Kells as of Q4 2026, with completion dates ranging from late 2026 through mid-2027:
- Kells Business Park Phase II – Approximately 320,000 square feet of speculative warehouse space across two buildings near 94 Avenue and 192 Street. Clear heights of 32 feet, ESFR sprinkler systems, and a combined 52 dock doors position this project for distribution and light logistics users. Completion is expected in Q1 2027.
- Golden Ears Logistics Centre – A single-building, 185,000-square-foot distribution facility on the former agricultural parcel at 9350 192 Street. The developer secured pre-leasing commitments for roughly 60 percent of the space prior to construction, with the remaining availability targeting tenants in the 40,000- to 75,000-square-foot range. Occupancy is anticipated in December 2026.
- Port Kells Industrial Strata – A multi-unit strata development offering 28 units ranging from 2,800 to 8,500 square feet. Unlike the larger distribution buildings, this project targets small-bay owner-users and trades contractors seeking fee-simple ownership. Sales launched in early 2026, and construction is on track for Q2 2027 completion.
Together, these three projects account for approximately 650,000 square feet of the active pipeline. The remaining 1.15 million square feet sits in various stages of permitting and site preparation, with groundbreaking expected over the next 12 to 18 months.
Approved and Pending Projects
Beyond active construction, the City of Surrey has approved or is processing development applications for several additional Port Kells sites:
- 192 Street South Lands – A 22-acre assemblage south of 92 Avenue is approved for a phased industrial campus totaling roughly 480,000 square feet. The first phase, a 210,000-square-foot building, is expected to break ground in Q1 2027 pending final servicing agreements.
- Kells Crossing – A mixed industrial-flex project on a 9.5-acre site near Fraser Highway and 188 Street. Plans call for approximately 180,000 square feet of flex space with 24-foot clear heights, targeting light manufacturing and contractor users. The project is currently in the rezoning process, with a targeted completion in late 2027 or early 2028.
- Infill Redevelopments – Several smaller parcels along 96 Avenue are undergoing redevelopment from single-user yard-intensive uses to multi-tenant industrial buildings. These infill projects add an estimated 150,000 square feet collectively, though timelines vary.
If all approved and pending projects proceed as planned, Port Kells will add more than 1.8 million square feet of industrial inventory between now and 2028—a roughly 35 percent increase over the submarket's existing base.
Infrastructure and Access Considerations
The appeal of Port Kells for developers stems from its relative proximity to Highway 1 via 176 Street and 200 Street, combined with land costs that remain below Campbell Heights and significantly below inner-ring submarkets like Burnaby or Richmond. However, infrastructure constraints have historically limited the pace of development.
Truck access remains a concern for larger distribution users. The intersection of 96 Avenue and 176 Street experiences congestion during peak hours, and the two-lane configuration of 192 Street north of Fraser Highway limits throughput for facilities relying on high trailer counts. The City of Surrey's capital plan includes widening 192 Street between 96 Avenue and 100 Avenue, but construction is not expected to commence until 2028.
Servicing capacity—particularly sanitary sewer and stormwater infrastructure—has also shaped project timelines. Several developments in the southern portion of Port Kells have required significant off-site upgrades, adding to construction costs and extending permitting windows. Prospective tenants and owner-users should factor infrastructure timelines into lease commencement assumptions.
Lease Rate Trajectory
Port Kells asking rents have risen steadily since 2023, tracking the broader Metro Vancouver trend but remaining at a discount to more established submarkets. As of Q3 2026, asking rates for new-construction warehouse space in Port Kells range from $18.50 to $21.00 per square foot triple-net, depending on building quality, clear height, and dock configuration. This compares to $22.00 to $26.00 per square foot in Campbell Heights and $24.00 to $28.00 per square foot in Richmond.
The influx of new supply will test absorption capacity. If tenant demand softens or construction timelines compress, landlords may face pressure to offer inducements—free rent, tenant improvement allowances, or fixturing periods—that have been largely absent from the Metro Vancouver market since 2021. Conversely, if absorption remains robust, the current discount to Campbell Heights may narrow further, pushing Port Kells rates into the low-$20s by late 2027.
For tenants evaluating relocation or expansion, Port Kells offers a window of opportunity. New-construction options with modern clear heights, efficient floor plates, and flexible demising are available for the first time in several years—a contrast to the tight sublease and second-generation market that has defined most of Metro Vancouver.
Implications for Owners and Investors
Investors considering Port Kells assets should weigh the submarket's growth trajectory against the near-term supply risk. Cap rates for stabilized industrial product in Port Kells currently range from 4.75 to 5.25 percent, reflecting investor confidence in long-term rent growth but also pricing in the infrastructure and access considerations noted above.
Strata product presents a different calculus. Owner-user demand for small-bay industrial units remains strong, driven by trades contractors, specialty manufacturers, and service businesses priced out of Vancouver and Burnaby. The Port Kells Industrial Strata project, priced in the $450 to $500 per square foot range, offers a cost basis well below comparable new-construction strata in Richmond or Delta. However, resale liquidity in emerging submarkets can be thinner, and buyers should assess their hold period assumptions accordingly.
For developers, Port Kells remains attractive but increasingly competitive. Land values have risen to the $3.5 to $4.5 million per acre range for shovel-ready industrial sites, compressing margins relative to earlier entrants. The economics still work for well-capitalized developers with strong tenant relationships, but the days of acquiring Port Kells land at a deep discount to Campbell Heights are largely over.
Key Takeaways
Port Kells is no longer an emerging submarket—it is an active one, with a development pipeline that will meaningfully expand Metro Vancouver's industrial inventory over the next two years. Tenants seeking modern distribution or flex space will find options here that are scarce elsewhere in the region. Investors should monitor absorption closely as new supply delivers, and owners of existing Port Kells buildings should consider how new competition may affect renewal negotiations.
NAI Commercial Vancouver tracks the Port Kells pipeline on an ongoing basis, providing clients with current availability data, lease comparables, and development timeline updates. For owners, occupiers, and investors evaluating opportunities in this submarket, informed timing decisions will be critical as the supply picture evolves through 2027.