Industrial space is being gobbled up quickly in central Canada thanks to a low energy prices and a weak Canadian dollar, according to a new report.
The report due out Monday from real estate firm CBRE Inc. was provided exclusively to the Financial Post and shows the Greater Toronto Area has become the tightest market in North America for industrial space, with a 4.2 per cent availability — the ratio of available space to total rentable space.
“The Toronto industrial numbers were just fantastic,” said Ross Moore, director of research for CBRE in Canada, in responding to his company’s second quarter analysis for 2015. “The only caution I would throw in there is if you look at the demand in leasing activity, is it not from manufacturing, it is from warehousing distribution.”
He said you could argue that, as exporters do better, they have to move parts around and that creates demand for space. But, looking closely at the numbers, some of major players doing the leasing are companies like FedEx, Sobey’s and other grocers, Moore said.
CBRE said the industrial sector story has become a tale of two Canadas, with 5.7 million square feet of net industrial space leased in Central and Eastern Canada in the second quarter versus just 2.8 million square feet in Western Canada during the same period.
“We’re bullish on manufacturing and it will be a tailwind for industrial,” said Moore, about the Central Canadian market.