Industrial Insight Reports - Canada Q4 2019
Industrial market remains tight across Canada, yet Calgary and Edmonton still witness high vacancy
While the overall Canadian industrial market continues to be tight, Alberta is divergent from the rest of the country. The West Coast and the East have all witnessed sub 3.0 percent vacancy rates as 2019 comes to a close, and Alberta has witnessed a much more balanced market with a 5.6 percent vacancy rate in Edmonton and a 7.8 percent vacancy in Calgary. It is worth noting however, that the industrial market in Alberta has been much more stable than the office market since oil prices crashed in 2014. Much of this can be attributed to the rise of e-commerce and even cannabis legalization as these industries have seen substantial growth and require significant industrial real estate.
In fact, e-commerce was the dominant sector in major leasing activity for the last 2 quarters of 2019 highlighted by the announcement of Amazon’s new 1.0 million square foot distribution centre in Toronto and Quebec’s first Amazon distribution centre in Lachine. Construction activity saw a peak last quarter as under construction space dropped 3.5 million square feet to 24.2 million as over 6.2 million square feet are being delivered in Toronto. However, under construction space is still well above the recent historic average.