“The Toronto industrial numbers have been great and it is largely due in part to the strong demand for warehousing and distribution centres,” said Ross Moore, director of research for CBRE, told CREW. “Retailers are becoming increasingly conscious of the need for efficient distribution centres with the emergence of online consumers.”
He also agreed that if exports continue to do better, more space is opening up that is drawing strong demand from commercial and industrial companies like FedEx, Sobey’s and other grocers.
His comments highlights a split between Western Canada and Eastern Canada, with 5.7-million square feet of net industrial space leased in Central and Eastern Canada in the second quarter, while 2.8-million square feet was leased in Western Canada. This is largely due to Canada’s troubled energy sector, said Moore.
Calgary continues to be a hamper for the national industrial and office market as Calgary’s downtown office vacancy climbed to upwards of 13 per cent in the second quarter, up from 11.8 per cent in the first quarter of 2015.
There is just over 3.8 million square feet of new office space currently under construction, with the downtown inventory at 39.2 million square feet. The quoted net rent was an average of $23.17 per square foot, compared to $28.34 a year ago. Total gross rent was an average of $43.02 per square foot, down from $47.54.
While Edmonton features slightly better number but with more construction leading to more properties, the city’s vacancy rate could also follow Calgary’s lead, said Moore.
Elsewhere, Montreal added a record 1.4-million square feet of build-to-suit facilities in Laval and the North Shore as it continue to work its way through an infrastructure overhaul.
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The industrial sector demand is looking strong in the GTA due to low oil prices and low availability rates with the warehousing and distribution centres fuelling positive results.