The arrival of the Omicron variant in November is untimely, coming at a point when many companies had signalled a return to office at the start of 2022. Although not unexpected, COVID-19 case counts have elevated in the past few months and will slow down the pace of the return. The expanded eligibility of booster shots has been announced in key provinces to help curb the spread.
- Tenants in the main cities this quarter were drawn to a flight to quality, and in some cases, have used subleases to explore a move from Class B to Class A or higher. There are more reported subleases being taken off the market, but the volume of decline has slowed.
- Demand for industrial space remained exceptionally strong throughout 2021, with the sector experiencing another quarter of declining vacancy, pushing rental rates upwards in Q4 2021.
- Supply chain constraints have impacted the holiday season, with retailers unable to sell goods they don’t have. A shift from a Just-in-Time to a Just-in-Case inventory strategy is expected to drive demand for industrial over the foreseeable future.
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