The industrial market continues to tighten for both sale and lease transactions. This quarter saw broad price ranges across sub-markets, and a strong increase in overall demand. Due to the lack of options available for land 25,000 square feet and above, tenants have resorted to proposed build options. Net rental rates rose from $10.72 to $12.10 per square foot this quarter, an overall increase of 12.87%. This was met with a slight increase in overall availability, as rates increased from 2.0 to 2.2 %.
The Central West has demonstrated an increase in activity of non-traditional tenants, these include gyms, CrossFit centers and breweries. This quarter also saw the rise of the “Amazon-effect” – an increase in land sales in close proximity to the site. Colliers International predicts an increase in the volume of firms locating in the area around the Amazon site in the quarters to come.
The strongest change this quarter was felt in the Kanata/Deep West submarket. Notable this quarter is the decline in vacant space in this submarket, which fell 60.0% to 42,896 square feet. This was met with a rise in vacant space of 29.6% in the East, to a total of 747,016 square feet.