Vacancy Low, Alternatives Few, Where to Grow?

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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. 

pie chart growth 
 
 
 
 
 
 
 
 

 

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.

 Growth Rates Bar Chart

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).

ind vac table 


For More Information, Please Contact:

Craig Hennigar

Senior Director

Vancouver

Craig is a Senior Director in the Valuation and Advisory Services group at Colliers and holds the AACI, P.App and CFA designations.  He offers appraisal and consulting services in the Greater Vancouver and Fraser Valley area as well as throughout British Columbia with particualr focus on the following assets and services: Commercial Property, Industrial Property, Expropriation Valuation, Hospitality Property and Recreational Land, and Multi-Family Property.

Craig is the former Director of Market Intelligence for Canada as well as a real estate broker and appraiser with over 25 years of experience in commercial real estate with work experience is focused on providing strategic and transactional assistance to national real estate firms.  With professional experience in real estate research, valuation, development, management, finance, consulting, and portfolio management roles he has worked with all major asset classes for valuation of both income producing real estate as well as expropriation, development projects.  His client list includes firms in the finance, technology, aerospace, and logistical industries as well as real  estate firms and has additional work experience providing ongoing economic knowledge, research, forecasting and review of the Canadian and international environment.

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