How quickly are Canada’s industrial markets growing?
Industrial Premises Under Construction in Canada
Colliers is tracking 21.9 M square feet of industrial premises under construction as of mid-year 2019. This represents an overall increase in inventory of 1.1%. While this sounds impressive, 80% of this space is being built in the three markets of Toronto, Vancouver and Edmonton.
In particular, with vacancy rates in Toronto and Vancouver of 0.4% and 1.5%, as well as a vacancy rate of 1.3% in Ottawa, three national markets are in need of relief through new construction; without this the ability to these markets to support new growth in industrial, manufacturing and third-party logistics (3PL) industries may be limited.
Although there is new supply coming, the amount added to these three markets with acute space shortages is limited in contrast to the size of the markets.
When adding the space under construction to the existing vacancy, there is little relief in sight for these markets with Ottawa and Toronto remaining at less than 2.0% vacancy. Vancouver, with the largest amount of space under construction relative to market size, can offer as much as 4.1% of inventory to new tenancies (excluding absorption during the construction period).