Q1 | 2009 C OL L I E R S I N T E RNATIONAL | INDUSTRIAL MARKET
Canadian
Snapshot Overall available space throughout Canada’s industrial markets is on the rise as demand softens and the tail end of new supply is delivered into various markets. Asking rental rates are counter-intuitively lagging the cycle, and have held at an average of $6.10 during the first quarter of 2009. Average asking rates were supported by Canada’s western cities where the downturn has hit slightly later, and markets are coming out of a period of very high demand as supply struggles to keep pace. Canada’s western
- Adding to the turbulence in the East is the auto industry crisis that is rippling through the supply chain, and impacting the industrial market in Ontario cities all currently sit with vacancy rates at or below 4.5% - still a landlord favoured position - tempered by the economic outlook and demand projections. In comparison, Canada’s eastern markets such as
Toronto and Montreal have availability rates north of 6.4%, progressing upward. It is anticipated that the national average asking rents will begin to move downward as the year progresses, and the western markets will adjust to the new demand and economic environment. Commodity prices are projected to remain subdued for 2009, and will begin a moderate recovery going forward which should help drive demand in the western markets in 2010 and 2011. In contrast, Canada’s eastern markets tend to follow import volumes more closely, as markets are heavily weighted to distribution and warehousing uses. Adding to the turbulence in the East is the auto industry crisis that is rippling through the supply chain, and impacting the industrial market in Ontario. The mitigating factor in the industrial property market is the short development cycle, which has allowed for a better balance of supply and demand during recent years. With new supply taps shut, the Canadian market will work to digest the currently available space, and is expected to be poised for a return to a more solid position in the medium term.
WAREHOUSE SPACE - RENT & AVAILABLE SPACE $10.00
7.0%
$9.00
6.0%
Market Indicators
Availability Rate 5.8% Net Asking Rent $6.10
Top 5 Net Rent
Saskatoon $9.00 Edmonton $8.00 Vancouver $7.25 Calgary
$6.75
Toronto
$5.70
Montreal
$5.50
Top 5
Vacancy Rate
$8.00
Vancouver 2.6%
4.0%
Edmonton 3.8%
$7.00 3.0% $6.00
2.0%
$5.00
1.0% 0.0%
$4.00 2006
2007 Net Rent
www.collier s.com
2008 Available Space
2009 YTD
Saskatoon 2.2%
5.0%
Calgary
4.5%
Toronto
6.4%
Montreal
7.3%