Demand for warehouse space in Canada far outweighs supply, setting the stage for a boom in industrial construction.
Canada needs another 40 million square feet of warehouse space over the next five years to keep up with demand after online sales rose 32 percent last year, according to CBRE figures reported by Bloomberg News.
That’s more than three times the combined total of warehousing space in Canada’s three tightest industrial markets —Toronto, Vancouver, and Montreal.
CBRE projects that e-commerce sales volume will climb steadily from $58.8 billion Canadian dollars to $92.7 billion by 2025.
A similar phenomenon is taking place in the United States. The market for warehousing was already tight in many parts of the U.S. when the pandemic supercharged the growing demand from the e-commerce sector. Net absorption hit an all-time record in the fourth quarter, according to CBRE.
Institutional investors poured tens of billions of dollars into the sector last year. Blackstone continued to pivot toward industrial from retail and hotels and now the sector accounts for 36 percent of the firm’s real estate equity value.
Foreign investors are also getting in on the action, buying up industrial properties even as total foreign investment in the U.S. fell 31 percent last year.
[Bloomberg News] — Dennis Lynch