Ottawa Industrial Market Report
Geographic Advantage to Benefit Long-Term Industrial Performance
Location fuels demand. The recent growth in online shopping has been a significant demand driver for industrial space in Ottawa over the past three years. With the region located directly between Toronto and Montreal — the nation’s two most populated cities — Ottawa has become a hotbed for distribution and logistics tenants looking for last-mile delivery space. This robust demand — which should remain above the long-term average, coupled with limited new supply — has caused tenants to turn to the construction pipeline to find space that fits their needs. However, with several projects fully pre-leased and with the total square feet currently under construction accounting for less than 1 per cent of existing inventory, a supply-demand imbalance continues to exist. Consequently, vacancy is expected to remain relatively stable throughout the year, while the average asking rent is expected to approach $15.00 per square foot. As a result, some investors appear to be acquiring older product with an eye toward re-development, or in an effort to boost rents up to the current market level.