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Industrial Takes Over the Investment Market

Investment Market Hero
I don’t think I’m breaking any news by pointing out industrial is on a roll. From leasing to development to investor interest, it’s all at record highs. However, it’s good to compare things globally and over time to get some perspective... and you can see the last few years are quite a departure.

Typically industrial was 15-20% of the investment market in both the US and Canada. That increased gradually, and by 2020 it was closer to 25%. However, the last three years have seen unprecedented growth (see chart below). And this is specific to Canada, as the US share for industrial remains at 2020 levels.

Before you say ”this is just one large deal”... that’s certainly a part of it, but the strength in the market goes beyond the Summit REIT acqusition. The industrial investment market is benefiting from many trends at once, including:

  • Increased interest from global investors, who view Canadian rents and prices as still affordable compared to many world markets
  • Demographic tailwinds, with record population growth driving ”beds and sheds” investment strategies
  • Declining investment volume in other major asset classes such as office
  • Lender aversion to long-term projects, which makes industrial more attractive than housing and office

Investment Market Graph

Summary
Industrial reached 50% of the entire Canadian investment market, more than doubling its share from 2020. 


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For More Information, Please Contact:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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