06/11/18 Blazing Demand Consumes Availability in Top Markets
Canadian industrial markets hit a 20-year low availability rate of 3.4% over the first quarter. A key factor has been Montreal, which has joined the ranks of Canada’s hottest markets!
Supply cannot keep pace with demand in these gateway markets, with the evolution of ecommerce continuing to propel this transformative cycle.
Industrial markets in Canada have outperformed other asset classes in recent years. Fundamentals remain strong, particularly given the limited supply of well-located, serviced land in strategically advantageous locations within the fastest growing markets.
- Montreal has caught the Toronto fever, with demand momentum driving availability down to 3.2% over the quarter. Ecommerce-related warehouse and distribution growth has been a game changer, and interestingly, a bitcoin mining frenzy has also played a key role.
- The Alberta “bounce” is beginning to have an impact on net rental rates, with both Calgary and Edmonton’s industrial markets experiencing modest gains for the first time since the oil price decline, providing clear evidence that the worst is over for these markets.
- Vancouver and Toronto, whose markets have been on fire in recent years, saw the fastest net rental rate growth in the country, with annualized increases of 17.8% and 9.3%, respectively. Watch out for more upward pressure as these markets tighten further due to relentless demand and low supply.
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