‘Pent-up demand’ will carry industrial CRE through pandemic

Steve McLean, (RENX) — Industrial real estate was a top-performing asset class backed by strong fundamentals when the COVID-19 pandemic shut down a large part of the Canadian economy.

The consensus from the five participants in an April 24 Canadian Real Estate Forums webinar is that industrial vacancy rates, leasing, rents, investment and development will for the most part emerge from the crisis in good shape.

Panel moderator Colliers International executive vice-president Gord Cook said the national vacancy rate for industrial properties had fallen to a historically low two per cent, with Vancouver and Toronto at half that. Net effective rents reached record numbers in many markets, averaging $8.60 per square foot nationally and reaching double digits in several markets.

There was 25 million square feet in the development pipeline, with the Greater Toronto Area (GTA) representing about 40 per cent.

Industrial trading volume in 2019 was just shy of $5 billion, including more than $1.5 billion in the GTA alone. Capitalization rates for industrial properties had gone below five per cent in some markets over the last three years.

“There wasn’t a sector that wasn’t firing on all cylinders,” said Cook. “On the buy side, we saw private, institutional and public markets very, very active and building up their portfolios and actively managing those real estate assets.”


To view the full article, click here.

Recent Posts