The online shopping boom has fundamentally altered the pace of industrial asset demand in Canada, according to a new analysis by CBRE.
At present, new industrial spaces aren’t built and completed fast enough to fulfill this appetite. During the first quarter, industrial availability across Canada was at 2.9%, down from 3.3% during Q4 2020, and from 3.1% during Q1 2020, CBRE reported.
The lowest availability rates were observed in the Waterloo region in Ontario (1.8%), Vancouver (1.7%), and Toronto (1.6%).
“We’re seeing multiple offers on any space that’s available, especially anything that’s existing and you can occupy this year,” said Jason Kiselbach, senior vice president and managing director of CBRE Vancouver. “We’re seeing anything under construction or planned, people are putting offers on it well ahead of it being delivered.”
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Warehouse space is a particularly prized commodity in this extremely competitive environment. And while this trend had its roots way before the pandemic struck, the e-commerce revolution impelled by COVID-19 kicked this into an even higher gear, with Canadian online sales reaching $3.5 billion in January (up 110.7% annually).
CBRE pointed to Toronto as particularly emblematic of the phenomenon. The market saw its average net asking lease rates grow by $0.20 per sq. ft. quarter-over-quarter to reach a new record high of $10.45 per sq. ft. in Q1 2021.