INDUSTRIAL MARKET REPORT | MID-YEAR 2021
Availability & Vacancy
The pandemic has exacerbated the imbalance between the increased demand for industrial space and the limited supply of quality space in the market.
The availability rate in Greater Montréal has thus maintained its downward trend over the past 12 months, dropping from 3.1% in the second quarter of 2020 to 2.5% in the second quarter of 2021, for a total available area of 8,872,380 square feet (sf).
Total vacancy in Greater Montréal also fell, reaching 1.4% at the end of the second quarter of 2021 from 1.8% a year earlier.
In the second quarter of 2021, the markets north of the Island of Montréal posted the lowest availability rates in Greater Montréal, as the availability rate for Lanaudière reached 1.1%, that of the Laurentians was at 0.6% and that of Laval was also at 0.6%. In fact, Laval has achieved a record availability rate for the past five years, with a total availability of only 151,440 sf.
On the South Shore of Montréal, availability remains low at 1.9%, which represents nearly 552,078 sf. In the western part of the island, the Vaudreuil-Dorion market recorded a remarkable drop in availability to 3.5%, down from 25.2% a year earlier.
The Midtown North sector currently has the highest availability rate compared to the rest of Greater Montréal, reaching 4.1% at the end of the second quarter of 2021.
Most of the sub-markets of Greater Montréal saw a decrease in availability while Midtown North, Midtown South and the North Shore saw minimal increases. With increased demand and a lack of quality products, the next 12 to 18 months could be challenging for industrial space occupants, especially with limited delivery in sight.
Powered by e-commerce
The pandemic has had the effect of accelerating the e-commerce industry by several years. With the recent changes in consumers' buying habits, companies like Amazon are the big winners from the pandemic and this has made the industrial sector one of the most active sectors of real estate at the moment.
The e-commerce giant announced earlier this year that it would open five new locations in Québec that would include two sorting centers and three delivery stations. A 48,300 square meter sorting center should open this year in Côteau-du-Lac while another center should be created in Longueuil.
In addition to e-commerce, other sectors that have contributed to the increased industrial demand are third-party logistics, food processing, home improvement and refrigerated foods companies.
These industries will certainly put enormous pressure on the industrial market as companies wrestle with the limited space and land available to accommodate their operations.
