Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}

Canadian Industrial Real Estate

Explosive Growth Exhausts Supply, Driving Rental Rates to New Highs

TORONTO, February 27, 2019 – Heated demand for industrial space by e-commerce and logistics service providers continues to outpace supply across Canadian markets. A severe shortage of space and rapidly rising rental rates remain the big stories for gateway markets such as Vancouver, Toronto, and Montreal, according to Cushman & Wakefield’s update report on Canadian Industrial Real Estate.

“This is the most dramatic and long-lasting transformation cycle in decades, and it’s far from over,” said Stuart Barron, National Director of Research.

As Barron explained: “Companies are reinventing themselves to serve growing online demand, and there’s huge pressure for fast last-mile delivery. This has detonated record demand for well-located warehouse and logistics space – and supply can’t keep up. The bottom line is whether you’re leasing or buying, you’re going to find an extreme scarcity of product and face sticker shock.”

In the GTA – the third largest industrial real estate market in North America – demand is so voracious that availability is almost under water at 1.5%. Not surprisingly, multiple offers have become common for any quality space that comes to market.

“Now more than ever, it’s critical for businesses to start looking well in advance of their lease expiries or growth projections, otherwise they may be out in the cold until supply catches up,” said Barron.

As the report outlines, Canadian gateway markets are seeing the strongest overall demand since 2000, with the national availability rate plunging to a mere 3.1% as of Q4 2018 - the lowest on record. Toronto, Vancouver, and Montreal, which are seeing the lion’s share of growth, are all at historic low availability rates of 1.5%, 2.1%, and 4.1%, respectively.

Further, escalating land and construction costs have contributed to tempered development over the past four years, causing rental rates to soar. Canada-wide asking rental rates increased by 10.1% in 2018 and average rates surpassed $8.00 per square foot. Toronto saw asking rental rates rise by 17.6%, the fastest growth in the country. Vancouver, which has seen the most significant rise in rental rates over the past four years saw rate pressure of 10.5% in 2018, followed by Ottawa and Montreal at 7.2% and 6.5%, respectively.

Looking out over the next two years, the report predicts that Toronto and Montreal will remain extremely tight with continued upward pressure on rental rates, with Vancouver also remaining hot. Stronger investment returns, driven by rising rental rates, will spur development growth by late 2020 but, until then, larger tenants looking for space in key markets will have to consider outlying regions.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit or follow @CushWake on Twitter.

With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All