The construction boom in industrial real estate is not a pipe dream. Nearly 5 times more warehouses are currently being built than the recent annual average.
Posted at 4:42 p.m.
Currently, nearly 465,000 square meters (5 million square feet) of industrial buildings are under construction in the Montreal region, according to a recent study by Avison Young. The annual average hovered around 93,000 m2 (1 million ft2) from 2015 to 2020.
Despite this significant increase in supply, the market, which is extremely tight with a vacancy rate of 1.3% and rents rising rapidly, will remain favorable to owners, as more than 80% of the area under construction is rented from ‘advance.
The proliferation of new buildings has a negative impact on the bank of available land, which is depleted a little more each time, which raises fears for future projects.
“The best use of land and the ecological footprint of projects, which have been long-standing issues in the residential and office sectors, are now becoming issues in the industrial sector”, says Marie-France Benoit, Director, Market Intelligence at Avison Young, in an interview with La Presse.