Montreal Industrial Investment Forecast
Lack of Available Space Encourages Building and Paves Way for Rent Gains
Health crisis accelerates need for space. Soaring e-commerce sales and access to one of North America’s busiest inland ports have led to a very tight industrial market in Montreal. The Port of Montreal saw roughly 1.7 million TEUs pass through last year. Meanwhile, higher-income job growth is bolstering local spending, which will likely increase import activity in the years ahead as more goods are consumed by the metro’s residents. These trends have led to robust absorption of available space, as the health crisis pushes more citizens to order goods online. Nearly 8.2 million square feet of industrial space was absorbed in 2021, compressing the vacancy rate to 2.2 per cent. With little remaining space fit for modern use, developers are trying to keep pace, but conditions will hold tight, as much of the 2022 completion schedule is pre-leased. Many of these projects have advertised rents above historic averages in the metro, indicating the potential for a strong average asking rent climb this year in Montreal. Developers and investors are also pursuing land purchases in distant areas, signaling expectations for future demand.