Industrial real estate contributes $21.7bn to economy

Industrial buildings are getting plenty of love from investors as construction and investment contributes $21.7 billion to Canada’s economy, according to a new report by Realpac.

The report, The contributions of the industrial real estate sector to the Canadian economy, shows that capital investment increased from $6.7 billion to $8.7 billion between 2009 to 2013.

What’s more, construction investment in new industrial buildings rose $1.4 billion, to $6.8 billion, and a total of $1.9 billion was invested for upgrade and improvements. Property and building management also contributed $1.4 billion in management fees.

The numbers show that industrial real estate has become a solid investment option alongside residential and commercial property, as the report also shows that capital investment in industrial real estate equates to more than a third of the entire Canadian real estate sector.

Peter Epstein, a sales representative with Keller Williams, said that he sees more and more of his clients looking for industrial properties to invest in.

“One of them owns a contracting business and holds an industrial property, but his business is expanding and he’s look at buying another one and leasing out the old one,” said Epstein.

“If he were to buy a second one and decides that he has enough space, he could create a separate space in the second property to lease as well so it’s providing a lot of opportunities for different investors.”

Despite all the positives, demand still outweighs supply to some degree, as Epstein also has other clients who are finding it hard to find industrial properties in a good location.

“Interest rates are low and holding real estate guarantees some leverage, but it doesn’t mean there are properties everywhere. I’ve been looking for months for one client and haven’t found anything yet,” he said.

Still, Ontario, Quebec and Alberta lead all provinces in the amount of economic activity generated from investments in the industrial industry, with Ontario out from of the pack, generating $3.7 billion.

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