Sustained Growth in Industrial Real Estate

A notable phenomenon within the Canadian industrial real estate landscape is the consistent rise in lease rates and sale prices. Contrary to expectations, industrial real estate currently claims the title of the nation’s most prosperous commercial real estate category. A striking observation is the resurgence of industrial investments to unprecedented heights in 2021 following a period of stagnation induced by the pandemic in 2020. This upward trajectory in growth carried into 2022 and remains steady as of 2023.

Nationwide Trends and Variances

While lease rates and sale prices naturally exhibit variations across the country, the prevailing direction is a consistent upward movement in numerous Canadian regions. For instance, Montreal witnessed a remarkable 74 percent surge in industrial rents, followed by a 41 percent increase in Calgary, 31 percent in Toronto, and 18 percent in Vancouver during 2022.

Influential Factors Behind the Trends

Several factors synergistically contribute to shaping these trends:

Property Size and Quality: The characteristics and specifications of the property, including its size and quality, have a direct impact on lease rates and sale prices.

Location: The geographical placement of the property plays a significant role in determining its value, with proximity to key commercial centers being a crucial factor.

Market Conditions: The overall market climate, including supply and demand dynamics, significantly influences lease rates and sale prices.

Terms and Conditions: The specific terms and conditions of agreements affect the financial aspects of industrial real estate transactions.

Amenities and Services: The availability of amenities and services within and around the property can contribute to its overall value.

Broader Market Dynamics

The industrial real estate market’s dynamics are also influenced by wider factors:

Supply and Demand: The balance between supply and demand within the market has a substantial impact on lease rates and sale prices.

Population Growth: Growing populations contribute to increased demand for industrial properties.

Economic Conditions: Favorable economic conditions drive industrial real estate demand and pricing.

Government Policies: Government policies and regulations play a role in shaping the industrial real estate landscape.

The resilience and sustained growth of Canada’s industrial real estate sector are evident in the rising lease rates and sale prices across the nation. This performance showcases the sector’s pivotal role in underpinning economic growth and trade activities. As the industry continues to evolve, these trends reflect the collective efforts of various factors that define the industrial real estate landscape.