Amazon’s Canadian expansion continues unimpeded with several new or under-construction distribution centres across the country.
This will almost certainly aggravate the already-crowded industrial markets in Toronto and Vancouver, according to property research and technology firm CoStar.
The situation is shaping up to be an intense arena, with non-retail industrial market players finding themselves in a fevered struggle for the throne.
“We now have e-commerce fulfillment centres going in and taking up space, and that’s almost like retail taking up industrial space — and that’s happening more and more,” CoStar head of market analytics Roelof van Dijk told Postmedia in an interview.
“That’s been driving down vacancy in those markets because we just haven’t kept up with construction activity.”
Following the e-commerce giant’s launch of a 600,000-square-foot facility in Calgary last year, its massive installation measuring one million sf has just been completed in Ottawa.
Looking forward to 2020, another one-million-sf facility is slated to begin operations in Edmonton.
“Amazon is trying to up their game [to] get more same-day or next-day [delivery] capacity in some of these markets that they didn’t really have … at this point,” van Dijk explained.
Ultimately, Amazon might end up convincing other retail companies to jump on the train.
“They’re getting bigger and badder and that’s not going to stop,” van Dijk noted. “If Amazon is getting bigger and faster in their local market, [competitors are] going to need to do the same.”