The steady increase in the importance of e-commerce is driving greater demand for Canada’s commercial and industrial spaces, according to CBRE executive vice-president and executive managing director Paul Morassutti.
Investment in commercial real estate last year totalled $1.8 billion, a 63.5% increase over the previous year. The vacancy rate among industrial properties is at a 16-year low.
In particular, the desirability of spaces near city centres is on an upward trend. Leasing activity for warehouses and distribution centres in the Waterloo region has been accelerating because of online shopping, CBRE stated in its latest national market report.
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“Consider this: for every $1 million in online sales we need approximately 1.3 million square feet of distribution space,” Morassutti said, as quoted by the Waterloo Record.
Market fundamentals and leasing activity also remain strong, even as other observers are predicting the beginnings of an economic downturn before 2018 ends, he added.
The CBRE report added that the region’s burgeoning tech sector is also stoking hunger for office space.
“We are currently nine years into an incredible bull run for commercial real estate,” Morassutti stated. “And the question that arises more and more frequently is: Have we peaked?”