Canada's industrial market will enjoy an exceptional 2019

  5/9/2019 |   SHARE
Posted in Commercial Real Estate by Terra Realty| Back to Main Blog Page

business report ideas

A robust 2018 will serve as the foundation of the Canadian commercial/industrial property market’s strength for the foreseeable future, according to Avison Young’s Spring 2019 Global Industrial Market Report.

The study – which found that for the most part, global demand for the industrial asset class is on the upswing – cited the burgeoning online buy-and-sell space as the central factor in this development.

“The demand for space continues to be driven by e-commerce and last-mile logistics as retailers seek further supply-chain efficiencies,” Avison Young explained.

“Online retail giants and their third-party logistics partners are impacting market dynamics with their demand for large facilities near major cities. This trend has resulted in rising land and development costs in many key markets in which the largest companies are driving demand for customized design-build facilities that are fully automated and reliant on new technologies.”

Last year’s strong results bode well for the Canadian industrial market’s “exceptional” prospects this year. In fact, demand is already feverish to the point of eating up any new addition to inventory almost as soon as it becomes available.

“While Vancouver and Toronto remain key markets for occupiers and investors, scarcity of product was evident in the single-digit vacancy rates posted across the country in the first quarter of 2019,” Avison Young stated.

“Nationally, the industrial sector remains undersupplied – demand is outpacing new development and will continue to do so, even though almost twice as much space is under construction compared with spring 2018.”

Canada’s industrial vacancy rate stood at a record-low 3% as of the end of Q1 2019, fully 70 basis points lower than the levels seen the same time last year. Indeed, the three lowest rates in North America during the quarter were observed in Ottawa (1.6%), Toronto (1.5%), and Vancouver (1.2%).

“E-commerce remains the industrial sector’s catalyst for success as retailers and developers strive to perfect the supply chain,” Avison Young COO (Canadian operations) Mark Fieder said.

“This situation is most apparent in Toronto – and in Vancouver, where strata units increasingly offer the only opportunities for developers to justify their land costs. A focus on multi-storey facilities may be the next logical step to make the most of restricted urban sites.”



Commercial Real Estate, Commercial Real Estate Investments, GTA Commercial Real Estate, Industrial Real Estate, Toronto Commercial Real Estate



At Your Service

Thinking of buying or selling a property, or have a question regarding the real estate market? Fill out the form below and we'll get back to you promptly.