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Warehouse vacancy rates slip below 1% in many Canadian cities

DCN-JOC News Services
Warehouse vacancy rates slip below 1% in many Canadian cities

NEW YORK CITY—A new report from Turner & Townsend says Canada continues to see strong growth in the warehousing market, with all its major cities seeing all-time highs in leasing activity over the past 12 months.

Aligned with trends in the U.S., e-commerce is proving a major driver of demand with destinations such as Vancouver, London, Waterloo Region and Toronto having availability rates of less than one per cent

The information comes from the firm’s annual Warehouse Cost Index and Industry Survey. The Warehouse Cost Index 2021 reveals the rising costs of constructing industrial space across global markets, driven by a combination of a high volume of projects, intense competition and a lack of contractor capacity.

The research analyzes construction input costs, including labour and materials, across 66 key logistics markets, alongside industry sentiment and insight from logistics sector professionals. The Index shows supply chain friction and the increasing difficulty of obtaining labour and materials in 2021 has fuelled above-average cost inflation, while providing an opportunity for supply chains to increase margins.

In Canada, while domestic demand has been steadily strengthening throughout 2021, producers and manufacturers have struggled to keep up amid the global supply chain disruptions. This has pushed up the cost of goods for businesses and households, with inflation reaching 4.4 per cent year-on-year in the 12 months to September 2021.

While employment levels are back up to pre-pandemic levels, there remains a chronic shortage of skilled labour within the Canadian construction market. All provinces continue to grapple with an aging labour force.

Turner & Townsend also reports the Government of Canada, as part of its drive to strengthen trade corridors, confirmed in July 2021 that an additional $1.9 billion of investment will flow from the National Trade Corridors Fund to reduce barriers to trade and build long-term resilience.

 

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